LOAN AGREEMENT
Agreement made February 21, 1997 by Electronic Hardware Corp., a New York
corporation with offices at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, XX 00000
(hereinafter called Borrower) and Xxxxx Field Co. Inc., Xxxxxx Xxxxxxxx, Xxxxx
Xxxxxxx and Xxxxx Xxxxxx, New York corporations, with offices at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 (hereinafter called guarantors).
This agreement is made in connection with a loan of $250,000.00 to Borrower from
Long Island Development Corporation, a New York corporation with offices at 000
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (hereinafter called LIDC or
lender). The loan is being made so that Borrower can make certain renovations,
purchase certain equipment and installations and/or for working capital.
Borrower has signed a note obligating itself to repay the loan. Guarantors have
signed a guarantee obligating themselves to repay the loan. Borrower and
guarantors represent and agree as follows:
1. Use of Proceeds: They will use the proceeds of the loan as permitted
by the Commitment Letter and Loan Memorandum of the Lender - New York
State Department of Economic Development Long Island Revolving Loan
Fund for Defense Diversification dated September 27, 1996 (hereinafter
the "Memorandum").
2. Financial Information: During each year of the loan term, Borrower will
submit to LIDC (a) an annual financial statement prepared by an
independent accountant in such form as LIDC may approve beginning with
its financial statement for 1996 and (b) its federal tax return
beginning with such return for FYE 1996 within 90 days of the end of
each fiscal year. Borrower agrees that LIDC may obtain said financial
statements and tax returns directly from Borrower's accountant.
3. Financial Information: During each year of the loan term, each
Guarantor will submit to LIDC (a) an annual financial statement
prepared by an independent accountant in such form as LIDC may approve
beginning with its financial statement for 1996 and (b) its federal tax
return beginning with such return for FYE 1996 within 90 days of the
end of each fiscal year. Each Guarantor agrees that LIDC may obtain
said financial statements and tax returns directly from its accountant.
4. Records: Borrower and guarantors will at all times keep proper books of
account and records regarding their operations and the premises.
Borrower and guarantors hereby authorize LIDC to make or cause to be
made, at their expense and in such manner and at such times as LIDC may
require, (a) inspections and audits of any books, records and papers in
the custody or control of borrower, guarantors or others, relating to
Borrower or guarantors' financial or business conditions, including the
making of copies thereof and extracts therefrom.
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Borrower and Guarantors hereby authorize all Federal. State and municipal
authorities (a) to furnish reports of examinations, records, and other
information relating, to the conditions and affairs of Borrower and guarantors
and any desired information from reports, returns, files and records of such
authorities upon request therefore by LIDC; and (b) to permit representatives of
LIDC to have full access from time to time to, and make copies of and extracts
from, any and all reports or returns by, or with respect to Borrower or
guarantors, and all reports of examiners or other information concerning
Borrower or guarantors contained in the files and records of such authorities.
Borrower and Guarantors agree to give LIDC access upon request to said
documentation for inspection and copying.
5. Reimbursable Expenses: Borrower and guarantors will, on demand,
reimburse LIDC for any and all expenses incurred, or which may be
hereafter incurred, by LIDC from time to time in connection with or by
reason of Borrower or guarantors' application for, and the making and
administration of the Loan.
6. Profits: There shall be no distribution of profits to shareholders and
no additions to the profit sharing nor pension funds of owners and
officers of Borrower unless Borrower is profitable and can afford same
in addition to payments in connection with this loan and other carrying
charges on the premises. Nothing herein shall prevent an employee from
making a contribution pursuant to the 401K plan.
7. Fees and Commissions: Borrower and guarantors certify they have not
directly or indirectly paid or agreed to pay any fees or commissions or
other compensation in connection with the application or closing of the
loan except their own counsel and as follows. Borrower and guarantors
further agree they will not pay any sums other than these listed in
connection with the application and closing of the loan:
Name & Address Service Fee
Xxxxxx and Xxxx LIDC Legal $1,000.00
Xxx Xxx Xxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000-0000
Long Island Development Corp. Commitment and $2,500.00
000 Xxxxxxxxx Xxxxx
Xxxxx 000 Application fees
Xxxxxxxxx XX 00000
8. Liability: Borrower and guarantors are jointly and severally liable
hereunder.
9. Borrower and guarantors agree to conform to the terms and conditions of
the commitment letter and loan memorandum.
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10. Omitted
11. Toxic Waste: Borrower and guarantors will keep the premises free from
pollution with toxic waste and will comply with all environmental laws
and will indemnify Lender from any liability resulting from any past,
present or future toxic waste contamination or damage and or clean up
responsibilities in connection with the premises and the additional
collateral.
12. Parties Affected: This agreement shall be binding upon Borrower,
guarantors and their successors and assigns and shall inure to the
benefit of LIDC and their successors and assigns.
13. Hazard Insurance: Borrower and Guarantors hereby agree to maintain
hazard insurance upon all of its tangible assets in the minimum amount
of eighty percent of value during the life of the loan, said insurance
naming LIDC as mortgagee payee/loss payee as appropriate. Borrower and
Guarantors also agree to maintain appropriate liability, workmen's
compensation and contents insurance.
14. Omitted
15. Omitted
16. Omitted
17. Acceleration: A violation of any one term of this loan agreement or of
the promissory note of even date or of any requirement in connection
with the loan imposed by LIDC may, at the option of LIDC, constitute a
default of the entire loan and the entire remaining indebtedness shall
immediately become due and payable without notice or demand.
18. Waiver: A Waiver by LIDC of any one term of this loan agreement shall
not be effective unless in writing and shall not constitute a waiver of
any other term.
19. Commitment Letter and Loan Memorandum: Borrower and guarantors agree
that all terms and conditions imposed by the Commitment Letter and Loan
Memorandum are hereby incorporated into this loan agreement and in case
of inconsistency between the terms of this loan agreement and the
Memorandum, Borrower and guarantors agree that they will abide by the
decision of LIDC as to resolution of such inconsistency.
20. Terms: The undersigned certify that they have read and are familiar
with each term of this loan agreement and understand the requirements
herein and will abide by them.
21. Adverse Change: Borrower and guarantors certify to Lender that there
has been no adverse change in the business, property or condition
(financial or otherwise) of
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adverse change in the business, property or condition (financial or
otherwise) of Borrower or Guarantors since the date of application
herein and that Borrower or guarantors will advise Lender of any
adverse changes from this date forward within ten (10) days of same.
22. Management: Borrower agrees not to execute any contracts for management
consulting services without the prior written consent of LIDC.
23. Change of Control: Borrower and guarantors agree that any and all
outstanding obligations may be accelerated and payments called for by
LIDC if the Borrower or guarantors, during the term of this loan,
effect a change of control of their businesses (management or
ownership, including ownership referred to in paragraph 27 of this
agreement).
24. Amount Due: Borrower and guarantors agree that the "amount due" at any
time during loan term includes the unpaid principal and accrued
interest.
25. New Debt: Borrower and guarantors agree not to incur additional (new)
financial obligations without LIDC's prior written consent other than
normal trade debt and other debt which it can afford while still
remaining profitable.
26. Ownership Premises: Borrower and guarantors agree that premises are
owned by K&G Realty Inc. an affiliate of the Borrower and (the
"affiliate") as of this date and agree that the entire indebtedness
hereunder and under promissory note of even date shall immediately
become due and payable without notice or demand if there is a change of
said premises ownership during the loan term without prior written
consent of LIDC.
Occupancy of Premises: Borrower and guarantors agree that the entire
premises are leased from the affiliate to borrower for the term of this
loan. Borrower and guarantors agree that there shall be no assignment
of said lease nor further subletting under said lease except with the
prior written consent of LIDC. Borrower and guarantors agree that
failure by Borrower to occupy at least 100% of the premises during the
term of the loan except with prior written consent of LIDC shall
constitute a default under the loan.
27. Ownership: Borrower and guarantors agree that the entire indebtedness
due hereunder and under promissory note of even date shall become
immediately due and payable without notice or demand if there is a
change of ownership of Borrower or guarantors during loan term without
LIDC's prior written consent. With respect to a corporation, this
applies to ownership represented by Common Stock, as well as authorized
but unissued stock, as well as Treasury Stock. Borrower and any
corporate guarantor(s) are each owned as follows as of the date of this
agreement:
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Xxxxxx Xxxxxxxx 1/3 President
Xxxxx Xxxxxxx 1/3 V.P. / Sec'y
Xxxxx Xxxxxx 1/3 Chairman
28. UCC's: Borrower and guarantors hereby grant to LIDC a security interest
in all fixtures attached to or used in connection with the premises now
existing and hereafter acquired or created subject to no prior liens
except Republic National Bank.
LIDC is hereby authorized to file Financing Statements under the New
York Uniform Commercial Code without Borrowers signatures. Borrower and
guarantors agree to pay the cost of filing said financing statements or
renewals thereof during the loan term.
It is agreed that Borrower owns all said fixtures and shall not
transfer, sell, assign or otherwise dispose of said fixtures nor permit
any other security interest to be created thereon without LIDC's
written approval.
29. Business Form: Borrower and guarantors shall not conduct business
under any other name than those used at date of this agreement nor
change nor reorganize the type of business entity under which they do
business except upon prior written approval of LIDC. If such approval
is given, Borrower and guarantors agree that all documents, instruments
and agreements demanded by LIDC shall be prepared and filed at Borrower
or guarantors' expense before such change of name or business entity
shall occur. Borrower or guarantors shall pay the filing and recording
costs of any document or instruments necessary to perfect, extend,
modify or terminate the security interest created hereunder, as
demanded by LIDC.
30. Liens: Borrower and guarantors shall maintain their assets and its
business premises in good condition, pay promptly all taxes, judgments
or charges of any kind levied or assessed thereon, and keep same free
from mortgages or liens except those permitted by LIDC.
31. Employees: During the loan, Borrower will provide LIDC with statistics
as requested regarding Borrower's employees.
32. Hereafter-Formed Subsidiaries and Affiliates: Borrower and guarantors
shall cause any wholly owned subsidiary or any affiliate hereafter
formed or acquired by Borrower or guarantors within 30 days of such
formation or acquisition, to unconditionally guarantee in writing the
payment of all the liabilities and obligations of Borrower and
Guarantors to LIDC. An affiliate is defined as a company with 50% or
more common ownership between it and borrower or guarantor.
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Borrower and guarantors shall not transfer assets to a subsidiary or
affiliate or any other entity other than among those signing this
agreement without the prior consent of LIDC.
33. Other Laws: Borrower and guarantors shall comply with all Federal and
State laws pertaining to equal opportunity employment.
34. Indemnification: Borrower and guarantors agree to indemnify LIDC for
any and all claims against LIDC or costs, expenses, liabilities or
damages incurred by LIDC in connection with the Loan and the Premises.
35. Events of Default: The following shall constitute a default of the
loan:
a. Falsity of any statements, certificates, reports, representations or
warranties made or furnished by Borrower or guarantors or their
representative in correction with the making of the Loan or the
fulfillment of this Agreement, the Note, or the Security Agreement;
b. Insolvency or inability of Borrower or guarantors to pay their debts
generally as they become due;
c. Entry of an order, judgment or decree by court of competent
jurisdiction appointing a receiver, trustee or liquidator of Borrower
or guarantors or for a substantial part of the assets of Borrower or
guarantors;
d. Institution by or against Borrower or guarantors of any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceedings,
provided that such proceedings are not contested in good faith;
e. Suspension of all or a substantial part of the operations of
Borrower conducted on its business premises;
f. Vacancy of all or a substantial part of the business premises of the
Borrower;
g. Failure to provide LIDC with copies of current receipted real estate
tax bills and assessments or evidence of payment thereof, as LIDC may
demand;
h. Failure to maintain in full force and effect valid insurance
policies, if originally required;
i. Failure to terminate or subordinate within thirty (30) days after
filing any financing statement affecting the mortgaged fixtures,
chattels or articles of personal property filed
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by other than LIDC and without LIDC's written consent (with the
exception of continuation statements);
j. Failure to comply with any of the terms and conditions of this
Agreement, or the Memorandum, and/or failure to perform or abide by any
of the covenants, warranties or representations made in this Agreement
or the Memorandum;
k. Failure to comply with any of the terms and conditions of the
Mortgage, Note or any guaranty thereof executed of even date herewith;
1. Failure to comply with any of the terms and conditions of any other
loan from LIDC for the benefit of Borrower and/or Guarantors.
36. Remedies:
a. If any one or more of the Events of Default described in paragraph
35 hereof shall have occurred, then, and in such event, and at any time
thereafter, if any Event of Default shall then exist, LIDC may, at its
option, declare the Note to be due and payable, whereupon the maturity
of the then unpaid balance of the Note shall forthwith become due and
payable without presentment, demand, protest, or notice of any kind,
all of which are hereby expressly waived;
b. In case any Event of Default shall occur, LIDC may enforce its
rights or remedies by suit in equity or by action at law, or both;
c. No right or remedy herein conferred upon LIDC is intended to be
exclusive of any other right or remedies herein;
37. Miscellaneous:
a. Borrower and guarantors waive the right of a jury trial in any
action or proceeding brought in any Court by either party, or assigns,
arising out of the subject matter of this Agreement, the Loan or any
Note or other obligation secured hereby;
b. This Agreement may not be changed, modified or discharged, in whole
or in part, and no right or remedy of LIDC hereunder or under the Note
may be waived unless such change, modification, discharge or waiver is
in writing and signed by LIDC.
c. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein;
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d. Notices and Demands: Any notices or demands required by this
Agreement, the Note or the Mortgage, shall be in writing and delivered
personally or mailed to the party entitled to such notice or demand at
the premises.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed February 21, 1997.
Electronic hardware Corp.
BORROWER
SEAL
/s/ Xxxxxx Xxxxxxxx
---------------------------------
by: Xxxxxx Xxxxxxxx, President
ATTEST: /s/ Xxxxxx Xxxxxxxx
as attorney in fact for
/s/ for Xxxxx Xxxxxxx
------------------------------------------
Xxxxx Xxxxxxx, Secretary
Witness:/s/ [illegible]
----------------------------------
LONG ISLAND DEVELOPMENT CORPORATION
/s/ Xxxxxx Xxxxxxx
----------------------------
By: Xxxxxx Xxxxxxx
Asst. Secretary
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STATE OF NEW YORK }
.ss:
COUNTY OF NASSAU }
On February 21, 1997, before me personally came Xxxxxx Xxxxxxxx, to me
known who, being by duly sworn, did depose and say that he resides at BX 000
Xxxxxxxxxx Xx, Xxxxxxxxxx, XX 00000; that he is the President of Electronic
Hardware Corp., the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.
/s/Xxxxx Xxxxxxx
---------------------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 00, 000/x/0
XXXXX XX XXX XXXX }
.ss:
COUNTY OF NASSAU }
On February 21, 1997, before me personally came Xxxxxx Xxxxxxx, to me
known who, being by me duly sworn, did depose and say that he resides at Floral
Park, New York; that she is an Assistant Secretary of the LONG ISLAND
DEVELOPMENT CORPORATION, the corporation described in and which executed the
foregoing instrument; that she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that she signed her
name thereto by like order.
/s/Xxxxx Xxxxxxx
---------------------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 199/s/8
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LOAN PROMISSORY NOTE
$250,000.00 Xxxxx Place, New York
Dated: February 21, 1997
FOR VALUE RECEIVED, Electronic Hardware Corp., a New York
corporation with an office for the transaction of business located at 000
Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 (the "Borrower"), promises to
pay to the order of the LONG ISLAND DEVELOPMENT CORPORATION, a New York
State not-for-profit corporation, having an office for the transaction of
business located at 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx
00000 (the "Lender") the principal sum of Two hundred fifty thousand
($250,000.00) DOLLARS, with interest on the unpaid principal balance of
such amount from the date of this Note or such advance. as the case may
be, at 7% percent per annum. This Note evidences a loan (the "Loan") made
by the Lender to Borrower, in the principal amount hereof, and is secured
by (a) a security agreement on all machinery and equipment of Borrower;
and (b) such other security as may now or hereafter be given to the
Lender by Borrower as collateral for the Loan (the Security Agreement,
this Note and such other documents evidencing such other security which
may hereafter be given as further security for, or in connection with,
the Loan, being hereinafter collectively referred to as the "Loan
Documents").
PAYMENT OF PRINCIPAL AND INTEREST
Borrower shall make payments on account of the principal balance
plus pay interest at the Interest Rate on the unpaid principal balance of
this Note beginning on the 1st day of the first full month following the
Closing Date, and continuing on the first day of each month thereafter
until the Maturity Date (or such earlier date in the event the Lender or
subsequent holder of the Note [the "Holder"] accelerates Borrower's
obligations hereunder), at which time, the balance of principal remaining
unpaid plus any accrued and unpaid interest shall be fully due and
payable. Said payments of principal and interest shall consist of 120
equal monthly payments, each in the amount of $2,902.71, the first of
which shall commence on March 1, 1997 and on the 1st day of each month
thereafter, up to and including February 1, 2007.
GENERAL CONDITIONS
(a) METHOD OF PAYMENT. All payments under this Note are payable
at 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000, or at such
other place as the Lender shall notify Borrower in writing. The Lender
reserves the right to require any payment on this Note, whether such
payment is of a regular installment or represents a prepayment, to be by
wired federal funds or other immediately available funds or to be paid at
a place other than the above address.
(b) APPLICATION OF PAYMENTS RECEIVED. Except as otherwise
provided in this Note, all payments received by the Lender on this Note
shall be applied by the Lender as follows:
FIRST, to any unpaid Late Payment Charges (hereinbelow defined); and
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SECOND, to accrued and unpaid interest to the payment due date; and
THIRD, to the reduction of principal of this Note.
If an Event of Default (hereinbelow defined) occurs, the Lender may apply
any payments received to any sums due hereunder or under any other Loan
Document in such manner as it deems appropriate.
(c) LATE PAYMENT CHARGES. If Borrower fails to pay any amount of
principal and/or interest on this Note for fifteen (15) days after such
payment becomes due, whether by acceleration or otherwise, the Lender
may, at its option, whether immediately or at the time of final payment
of the amounts evidenced by this Note, impose a late payment charge (the
"Late Payment Charge") computed by multiplying the amount of each past
due payment by two (2%) percent, not to exceed $500.00. Until any and all
Late Payment Charges are paid in full, the amount thereof shall be added
to the indebtedness secured by any of the Loan Documents. The Late
Payment Charge is not a penalty and is deemed to be liquidated damages
for the purpose of compensating the Lender for the difficulty in
computing the actual amount of damages incurred by the Lender as a result
of the late payment by Borrower.
(d) PREPAYMENT. The principal balance may be prepaid in whole or
in part at any time without premium or penalty.
In the event the Lender receives partial prepayments, or in the
event that the Lender shall receive proceeds of condemnation or insurance
proceeds for application against the Loan, such prepayments and proceeds
shall be applied to installments of principal in the inverse order of
maturity and no prepayment premium shall be deducted from such
condemnation or insurance proceeds.
(e) ACCELERATION. If:
(i) Borrower fails to pay any sum due on this Note
within ten (10) days of the date the same is due; or
(ii) Borrower shall fail to perform any other
obligation required to be performed by Borrower under this Note, for ten
(10) days after the Lender has given written notice of such failure to
Borrower; or
(iii) Any warranty, representation or other statement
by or on behalf of Borrower in any instrument furnished in compliance
with or in reference to this Note be false or misleading in any material
respect; or
(iv) Borrower or any Guarantor shall generally not be
paying debts as they become due or file a petition or seek relief under
or take advantage of any insolvency law; make an assignment for the
benefit of creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator, custodian or conservator of Borrower or
any Guarantor or of the whole or substantially all of Borrower's or any
Guarantor's property or of any collateral pledged as security for this
Note; or if Borrower or any Guarantor shall file a petition or an answer
to
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a petition under any chapter of the Bankruptcy Reform Act of 1978, as
amended (or any successor statute thereto), or file a petition or seek
relief under or take advantage of any other similar law or statute of the
United States of America, any State thereof, or any foreign country or
subdivision thereof; or
(v) Under the provisions of any law for the relief or
aid of debtors, a court of competent jurisdiction or a receiver, trustee,
liquidator, custodian or conservator shall assume custody or control or
take possession from Borrower or any Guarantor of all or substantially
all of Borrower's or any Guarantor's property or any portion of any
collateral pledged as security for this Note; or
(vi) A Court of competent jurisdiction shall enter an
order, judgment or decree appointing or authorizing a receiver, trustee,
liquidator, custodian or conservator of Borrower or any Guarantor or of
the whole or substantially all of Borrower's or any Guarantor's property,
or any portion of the collateral pledged as security for this Note, or
enter an order for relief against Borrower or any Guarantor in any case
commenced under any chapter of the Bankruptcy Reform Act of 1978, as
amended (or any successor statute thereto), or grant relief under any
other similar law or statute of the United States of America, any State
thereof, or any foreign country or subdivision thereof and the same is
not stayed or discharged within sixty (60) days of entry; or
(vii) There is commenced against Borrower or any
Guarantor any proceeding for any of the foregoing relief or if a petition
is filed against Borrower or any Guarantor under any chapter of the
Bankruptcy Reform Act of 1978, as amended (or any successor statute
thereto), or under any other similar law or statute of the United States
of America, any State thereof, or any foreign country or subdivision
thereof, and such proceeding or petition remains undismissed for a period
of sixty (60) days or if Borrower or any Guarantor by any act indicates
consent to, approval of or acquiescence in any such proceeding or
petition; or
(viii) the Lender receives a notice to creditors with
regard to a bulk transfer by Borrower or any Guarantor pursuant to
Article VI of the Uniform Commercial Code; or
(ix) Any Guarantor defaults under or attempts to
withdraw, cancel or disclaim liability under any Guaranty issued to the
Lender or the Holder; or
(x) Any shares of the capital stock of the Borrower or
any Guarantor, if the Borrower or such Guarantor is a corporation, shall
be sold, transferred, conveyed, mortgaged, pledged, hypothecated or
alienated without the prior written consent of the Lender; or
(xi) Any partnership interest in the Borrower or any
Guarantor, if the Borrower or such Guarantor is a partnership, shall be
sold, assigned, transferred, conveyed, mortgaged, pledged, hypothecated
or alienated without the prior written consent of the Lender: or
(xii) Any material inaccuracy shall exist in any of the
financial statements or in any other information furnished by or to be
furnished by the Borrower or any Guarantor to the Lender to induce the
Lender to make the Loan evidenced by this Note; or
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(xiii) The death of any individual Borrower or
Guarantor or the dissolution of any corporate or partnership Borrower or
Grantor; or
(xvi) The Borrower or any other partnership or
corporate entity having common ownership with the Borrower, or any
Guarantor or any other partnership or corporate entity having common
ownership with any Corporate Guarantor, defaults under any other
agreement or document, now existing or in the future existing with the
Lender or the Holder; if a default shall be made by the Borrower or any
other partnership or corporate entity having common ownership with the
Borrower or by any Guarantor or any other partnership or corporate entity
having common ownership with any Corporate Guarantor, in the payment of
principal and interest or any charges on any note or other instrument
executed, or in the future executed and delivered to the Lender or the
Holder by the Borrower or any Guarantor or any other partnership or
corporate entity having common ownership with either the Borrower or any
Corporate Guarantor when and as the same shall become due and payable,
whether at a due date or by acceleration thereof; or
(xv) an event of default, under any other documents
executed by any Guarantor in connection with a loan or loans now existing
or in the future existing to any Corporate Guarantor and the Lender or
the Holder, shall have occurred; or
(xvi) and event of default, under any other Loan
Documents, shall have occurred;
then, and in any such event (an "Event of Default"), the Lender or the
Holder may, at its option, declare the entire unpaid balance of this Note
together with interest accrued thereon, to be immediately due and payable
and the Lender or the Holder may proceed to exercise any rights or
remedies that it may have under this Note or any other Loan Documents, or
such other rights and remedies with the Lender or the Holder may have at
law, equity or otherwise. In the event of such acceleration, Borrower may
discharge its obligations to the Lender or the Holder by paying:
(A) the unpaid principal balance hereof as at
the date of such payment,
plus
(B) accrued interest computed in the manner
set forth above, plus
(C) any Late Payment Charge computed in the
manner set forth above.
Plus
(D) any other sum due and owing the Lender or
the Holder under this Note
or any other Loan Document.
(f) INTEREST ACCRUAL. That if the whole of said principal sum
evidenced by this Note and interest, shall become due by exercise of the
option of the Lender or Holder after default by the Borrower or Mortgagor
under any of the terms, covenants and conditions of the Mortgage and
Security Agreement and/or this Note, or if the whole of said principal
sum and interest shall mature and become due under the terms, covenants
and conditions of the Mortgage and Security Agreement and/or this Note
regardless of default, if any, on the part of the
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Borrower or Mortgagor, then interest on said principal sum shall continue
to accrue at the rate provided for in this Note until said Principal sum
is fully paid.
(g) INTEREST AFTER MATURITY. In the event of Maturity by
acceleration or otherwise, the Interest Rate charged will be increased by
four (4%) percent per annum above the interest rate otherwise due. In no
event, however, will the rate charged exceed the maximum allowable by
law.
(h) COSTS AND EXPENSES ON DEFAULT. After default, in addition to
principal, interest and any Late Payment Charge, the Lender or the Holder
shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys' fees, incurred in connection with the
protection or realization of collateral or in connection with any of the
Lender's or Holder's collection efforts, whether or not suit on this Note
or any foreclosure proceeding is filed, and all such costs and expenses
shall be payable on demand and until paid shall also be secured by the
Loan Documents and by all other collateral held by the Lender or the
Holder as security for Borrower's obligations to the Lender or Holder.
(i) N0 WAIVER BY THE LENDER. No failure on the part of the
Lender or other holder hereof to exercise any right or remedy hereunder,
whether before or after the happening of a default, shall constitute a
waiver thereof, and no waiver of any past default shall constitute waiver
of any future default or of any other default. No failure to accelerate
the Loan evidenced hereby by reason of default hereunder, or acceptance
of a past due installment, or indulgence granted from time to time shall
be construed to be a waiver of the right to insist upon prompt payment
thereafter, or shall be deemed to be a novation of this Note or as a
reinstatement of the Loan evidenced hereby or as a waiver of such right
of acceleration or any other right, or be construed so as to preclude the
exercise of any right which the Lender may have, whether by the laws of
the state governing this Note, by agreement or otherwise; and Borrower
and each endorser or Guarantor hereby expressly waive the benefit of any
statute or rule of law or equity which would produce a result contrary to
or in conflict with the foregoing. This Note may not be changed orally, but
only by an agreement in writing signed by the party against whom such
agreement is sought to be enforced.
(j) WAIVER BY BORROWER. Borrower and each endorser or guarantor
of this Note hereby waives presentment, protest, demand, diligence,
notice of dishonor and of nonpayment, and waives and renounces all rights
to the benefits of any statute of limitations and any moratorium,
appraisement, exemption and homestead now provided or which may hereafter
be provided by any federal or state statute, including but not limited to
exemptions provided by or allowed under the Bankruptcy Code of 1978, both
as to itself personally and as to all of its or their property, whether
real or personal, against the enforcement and collection of the
obligations evidenced by this Note and any and all extensions, renewals
and modifications hereof.
(k) COMPLIANCE WITH USURY LAWS. It is the intention of the
parties to conform strictly to the usury laws, whether state or federal,
that are applicable to this Note. All agreements between Borrower and the
Lender, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise,
shall the amount paid or agreed to be paid to the Lender or the holder
hereof, or collected by the Lender or such holder,
- 5 -
for the use, forbearance or detention of the money to be loaned hereunder
or otherwise, or for the payment or performance of any covenant or
obligation contained herein, or in any of the Loan Documents, exceed the
maximum amount permissible under applicable federal or state usury laws.
If under any circumstances whatsoever fulfillment of any provision hereof
or of the Loan Documents, at the time performance of such provision shall
be due, shall involve exceeding the limit of validity prescribed by law,
then the obligation to be fulfilled shall be reduced to the limit of such
validity; and if under any circumstances the Lender or other holder
hereof shall ever receive an amount deemed interest by applicable law,
which would exceed the highest lawful rate, such amount that would be
excessive interest under applicable usury laws shall be applied to the
reduction of the principal amount owing hereunder or to other
indebtedness secured by the Loan Documents and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of
principal and such other indebtedness, the excess shall be deemed to have
been a payment made by mistake and shall be refunded to Borrower or to
any other person making such payment on Borrower's behalf. All sums paid
or agreed to be paid to the holder hereof for the use, forbearance or
detention of the indebtedness of Borrower evidenced hereby, outstanding
from time to time shall, to the extent permitted by applicable law, and
to the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, pro-rated, allocated and spread from the
date of disbursement of the proceeds of this Note until payment in full
of the Loan evidenced hereby and thereby so that the actual rate of
interest on account of such indebtedness is uniform throughout the term
hereof and thereof. The terms and provisions of this paragraph shall
control and supersede every other provision of all agreements between
Borrower, any endorser or Guarantor and the Lender.
(1) GOVERNING LAW: SUBMISSION TO JURISDICTION. This Note shall
be governed by and construed under the laws of the State of New York.
Borrower and each endorser or Guarantor hereby submits to personal
jurisdiction in said State for the enforcement of Borrower's obligations
hereunder or under any other Loan Document and waives any and all
personal rights under the law of any other state to object to
jurisdiction within such State for the purposes of litigation to enforce
such obligations of Borrower.
(m) WAIVER BY BORROWER OF JURY TRIAL. The Borrower hereby waives
trial by jury in any litigation in any court with respect to, in
connection with, or arising out of this Note, any other Loan Document or
the Loan, or any instrument or document delivered in connection with the
Loan, or the validity, protection, interpretation, collection or
enforcement thereof, or any other claim or dispute howsoever arising
between the Borrower and the Lender or the Holder.
(n) RIGHT OF SET OFF. Borrower grants to the Lender or the
Holder a continuing lien for the amount of this Note upon any and all
monies, securities and other property of Borrower and the proceeds
thereof, now or hereafter held or received by or in transit to the Lender
or the Holder from or for Borrower whether for safekeeping, custody,
pledge, transmission, collection or otherwise, and also upon any and all
deposits (general or special) and credits of Borrower with, and any and
all claims of Borrower against the Lender or the Holder at any time
existing. Upon the occurrence of an Event of Default, the Lender or the
Holder is authorized at any time and from time to time, without notice to
Borrower to set off, appropriate and apply any and all items hereinabove
referred to against this Note.
- 6 -
(o) AUTHORITY OF THE LENDER. Borrower authorizes the Lender to
date this Note as of the day when the Loan is made and to complete or
correct this Note as to any terms of the Loan not set forth herein at the
time of delivery hereof.
(p) NOTICES. Any notices required or permitted to be given
hereunder shall be: (i) personally delivered or (ii) given by registered
or certified mail, postage prepaid, return receipt requested, or (iii)
forwarded by overnight courier service, in each instance addressed to the
addresses set forth at the head of this Note, or such other addresses as
the parties may for themselves designate in writing as provided herein
for the purpose of receiving notices hereunder. All notices shall be in
writing and shall be deemed given, in the case of notice by personal
delivery, upon actual delivery, and in the case of appropriate mail or
courier service, upon deposit with the U.S. Postal Service or delivery to
the courier service.
(q) LIABILITY IF MORE THAN ONE BORROWER. If more than one person or
entity executes this Note as a Borrower, all of said persons or entities
are jointly and severally liable hereunder.
(r) ENTIRE AGREEMENT. This Note and the other Loan Documents
constitute the entire understanding between Borrower, the Guarantors, if
any, and the Lender and to the extent that any writings not signed by the
Lender or oral statements or conversations at any time made or had shall be
inconsistent with the provisions of this Note and the other Loan Documents,
the same shall be null and void.
IN WITNESS WHEREOF, the Borrower and each Guarantor has executed
this instrument the date first above written.
Electronic Hardware Corp.
BORROWER
SEAL
/s/ Xxxxxx Xxxxxxxx
------------------------------
by: Xxxxxx Xxxxxxxx, President
ATTEST:
/s/ Xxxxxx Xxxxxxxx
Attorney in Fact
/s/ Xxxxx Xxxxxxx
------------------------
Xxxxx Xxxxxxx, Secretary
- 7 -
Xxxxx Field Co. Inc.
/s/ Xxxxxx Xxxxxxxx
------------------------------
by: Xxxxxx Xxxxxxxx, President
/s/X. Xxxxxxxx /s/X. Xxxxxxxx
Attorney in Fact for Attorney in Fact for
/s/Xxxxxx Xxxxxxxx /s/Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxx
-------------------- ----------------------- -----------------------
Xxxxxx Xxxxxxxx Xxxxx Xxxxxxx Xxxxx Xxxxxx
STATE OF NEW YORK}
ss:
COUNTY OF NASSAU}
On February 21, 1997, before me personally came Xxxxxx Xxxxxxxx,
to me known who, being by duly sworn, did depose and say that he resides
at BX 000 Xxxxxxxxxx Xx, Xxxxxxxxxx, XX 00000; that he is the President
of Electronic Hardware Corp., the corporation described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he signed his name thereto by like order.
/s/ Xxxxx Xxxxxxx
----------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 0000
XXXXX XX XXX XXXX}
ss:
COUNTY OF NASSAU}
On February 21, 1997, before me personally came Xxxxxx Xxxxxxxx,
to me known who, being by duly sworn, did depose and say that he resides
at BX 000 Xxxxxxxxxx Xx, Xxxxxxxxxx, XX 00000; that he is the President
of Xxxxx Field Co. Inc., the corporation described in and which executed
the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it
was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
/s/ Xxxxx Xxxxxxx
----------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 1998
- 8 -
STATE OF NEW YORK}
ss:
COUNTY OF NASSAU}
On February 21, 1997, before me personally came Xxxxxx Xxxxxxxx,
to me known to be the individual described in and who executed the
foregoing loan promissory note, and acknowledged that he executed the
same.
/s/ Xxxxx Xxxxxxx
---------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 1998
ATTORNEY-IN-FACT
ACKNOWLEDGMENT
STATE OF NEW YORK}
ss:
COUNTY OF NASSAU}
On the 21st day of February, 1997, before me personally came Xxxxxx
Xxxxxxxx, to me personally known to be the person described and appointed
attorney-in-fact in and by a certain power-of-attorney executed by Xxxxx
Xxxxxxx dated January 8, 1997 (or to be recorded in the office of of
County simultaneously with the foregoing instrument), and acknowledged to
me that he has executed the foregoing instrument as the act of said
/s/ Xxxxx Xxxxxxx
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 1998
ATTORNEY-IN-FACT
ACKNOWLEDGMENT
STATE OF NEW YORK}
ss:
COUNTY OF NASSAU}
On the 21st day of February, 1997, before me personally came Xxxxxx
Xxxxxxxx, to me personally known to be the person described and appointed
attorney-in-fact in and by a certain power-of-attorney executed by Xxxxx
Xxxxxx dated January 8, 1997 (or to be recorded in the office of
__________________ of______________________ County simultaneously with the
foregoing instrument), and acknowledged to me that he has executed the
foregoing instrument as the act of said
/s/ Xxxxx Xxxxxxx
---------------------------------
XXXXX XXXXXXX
NOTARY PUBLIC, State of New York
No. 4732765
Qualified in Nassau County
Commission Expires August 31, 1998
SECURITY AGREEMENT (CHATTEL MORTGAGE)
THIS AGREEMENT, made the day of February 21, 1997 under the laws of the state
of New York
BETWEEN Electronic Hardware Corp. herein called the Debtor
whose business address is (if none, write "none")
000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, XX 00000
and whose resident address is
and Long Island Development Corporation herein called the Secured Party
whose address is 000 Xxxx Xxxx Xxxx,
Xxxxx Xxxxx, X.X.
WITNESSETH:
To secure the payment of an indebtedness in the amount of
$250,000.00 with interest, payable as follows:
120 monthly installments, with interest at 7% per
annum, the first of which is payable on March 1, 1997 and
monthly thereafter up to and including February 1, 2007.
as evidenced by a note or notes of even date herewith, and also to secure
any other indebtedness or liability of the Debtor to the Secured Party
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, including all future advances or loans
which may be made at the option of the Secured Party, (all hereinafter
called the "obligations") Debtor hereby grants and conveys to the Secured
Party a security interest in, and mortgages to the Secured Party,
(a) the property described in the schedule herein which the
Debtor represents will be used primarily
/ / for personal, family or household purposes
/ / in farming operations /X/ in business or other use
(b) all property, goods and chattels of the same classes as
those scheduled, acquired by the Debtor subsequent to the execution of
this agreement and prior to its termination. (If the property described
in the Schedule is for personal, family or household purposes then no
security attaches under this section (b) unless the debtor acquires
rights in them within 10 days after the Secured Party gives value.)
(c) all proceeds thereof, if any,
(d) all substitutions, replacements and accessions thereto (the
foregoing (a), (b), (c) and (d) hereinafter called the collateral).
1. DEBTOR WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
PAYMENT 1a To pay and perform all of the obligations secured
by this agreement according to their terms.
DEFEND 1b To defend the title to the collateral against all
TITLE persons and against all claims and demands whatsoever,
which collateral, except for the security interest granted
hereby, is lawfully owned by the Debtor and is now free
and clear of any and all liens, security interests,
claims, charges, encumbrances, taxes and assessments
except as may be set forth in the schedule.
ASSURANCE 1c On demand of the secured party to do the
OF TITLE following; furnish further assurance of title, execute any
written agreement or do any other acts necessary to
effectuate the purposes and provisions of this agreement,
execute any instrument or statement required by law or
otherwise in order to perfect, continue or terminate the
security interest of the Secured Party in the collateral
and pay all costs of filing in connection therewith.
POSSESSION 1d To retain possession of the collateral during the
existence of this agreement and not to sell, exchange,
assign, loan, deliver, lease, mortgage or otherwise
dispose of same without the written consent of the Secured
Party.
LOCATION 1e To keep the collateral at the location specified
in the schedule and not to remove same (except in the
usual course of business for temporary periods) without
the prior written consent of the Secured party.
LIENS 1f To keep the collateral free and clear of all
liens, charges, encumbrances, taxes and assessments.
TAXES 1g To pay, when due, all taxes, assessments and
license fees relating to the collateral.
REPAIRS 1h To keep the collateral, at Debtor's own cost and
expense, in good repair and condition and available for
inspection by the Secured Party at all reasonable times.
INSURANCE 1i To keep the collateral fully insured against
loss by fire, theft and other casualties, Debtor shall
give immediate written notice to the Secured Party and to
insurors of loss or damage to the collateral and shall
promptly file proofs of loss with insurors.
2. THE PARTIES FURTHER AGREE
NON-WAIVER 2a Waiver of or acquiescence in any default by the
Debtor, or failure of the Secured Party to insist upon
strict performance by the Debtor of any warranties or
agreements in this security agreement, shall not
constitute a waiver of any subsequent or other default
or failure.
NOTICES 2b Notices to either party shall be in writing and
shall be delivered personally or by mail addressed to the
party at the address herein set forth or otherwise
designated in writing.
LAW 2c The Uniform Commercial Code shall govern the
APPLICABLE rights, duties and remedies of the parties and any
provisions herein declared invalid under any law shall not
invalidate any other provision or this agreement.
DEFAULT 2d The following shall constitute a default by
Debtor:
non-payment Failure to pay the principal or any installment of
violation principal or of interest on the indebtedness or any notes
misrepresentation when due. Failure by Debtor to comply with or perform
levy-insolvency any provision of this agreement. False or misleading
death representations or warranties made or given by Debtor in
impairment of connection with this agreement. Subjection of the
security collateral to levy of execution or other judicial process.
Commencement of any insolvency proceeding by or against
the Debtor. Death of the Debtor. Any reduction in the
value of the collateral or any act of the Debtor which
imperils the prospect of full performance or satisfaction
of the Debtor's obligations herein.
REMEDIES ON 2e Upon any default of the Debtor and at the option
DEFAULT of the Secured Party, the obligations secured by this
acceleration agreement shall immediately become due and payable in
full without notice or demand and the Secured Party shall
have all the rights, remedies and privileges with respect
to repossession, retention and sale of the collateral and
disposition of the proceeds as are accorded by the
applicable sections of the Uniform Commercial Code
respecting "Default".
assembling Upon any default and upon demand, Debtor shall assemble
collateral the collateral and make it available to the Secured Party
attorneys' fees at the place and at the time designated in the demand.
etc. Upon any default, the Secured Party's reasonable
attorneys' fees and the legal and other expenses for
pursuing, searching for, receiving, taking, keeping,
storing, advertising, and selling the collateral shall be
chargeable to the Debtor.
deficiency The Debtor shall remain liable for any deficiency
resulting from a sale of the collateral and shall pay any
such deficiency forthwith on demand.
monies If the Debtor shall default in the performance of any of
advanced the provisions of this agreement on the Debtor's part to
be performed, Secured Party may perform same for the
Debtor's account and any monies expended in so doing shall
be chargeable with interest to the Debtor and added to the
indebtedness secured hereby.
FINANCING 2f The Secured Party is hereby authorized to file a
STATEMENT Financing Statement.
CAPTIONS 2g The Captions are inserted only as a matter of
convenience and for reference and in no way define, limit
or describe the scope of this agreement nor the intent of
any provision thereof.
[end of page]
The terms, warranties and agreements herein contained shall bind
and inure to the benefit of the respective parties hereto, and their
respective legal representatives, successors and assigns.
The gender and number used in this agreement are used as a
reference term only and shall apply with the same effect whether the
parties are of the masculine or feminine gender, corporate or other form,
and the singular shall likewise include the plural.
This agreement may not be changed orally.
IN WITNESS WHEREOF, the Parties have respectively signed and
sealed these presents the day and year first above written.
Electronic Hardware Corp.
Witness:/s/ [illegible] /s/ Xxxxxx Xxxxxxxx
----------------------------
by: Xxxxxx Xxxxxxxx, President
Long Island Development Corporation
/s/ Xxxxxx Xxxxxxx
-----------------------------
By: Xxxxxx Xxxxxxx, Asst. Sec'y
SCHEDULE
Describe items of collateral, the address where each item will
be located and describe any prior liens, etc., and the amounts due
thereon. If items are crops or goods affixed or to be affixed to real
estate describe the real estate and state the name and address of the
owner of record thereof.
Items Location, etc.
----- --------------
all personal property, including and without limitation, all present and
future accounts receivable, machinery, equipment, inventory (raw and
finished), contract rights, instruments, chattel paper, intangibles,
and/or fixtures, now existing or hereafter acquired or created, and all
additions and accessions thereto and exchanges and proceeds thereof.
The chief place of business of the Debtor, if other than stated
in this agreement, is:
GUARANTEE
The undersigned guarantees prompt and full performance and payment
according to the tenor of the within agreement, to the holder hereof, and, in
the event of default, authorizes any holder hereof to proceed against the
undersigned, for the full amount due including reasonable attorneys' fees, and
hereby waives presentment, demand, protest, notice of protest, notice of
dishonor and any and all other notices or demand of whatever character to which
the undersigned might otherwise be entitled. The undersigned further consents to
any extension granted by any holder and waives notice thereof. If more than one
guarantor, obligation of each shall be joint and several.
WITNESS the hand and seal of the undersigned this February 21, 19 .
Xxxxx Field Co. Inc.
/s/ Xxxxxx Xxxxxxxx (L.S.)
---------------------------------
by: Xxxxxx Xxxxxxxx, President
Address
---------------------------------
SECURITY AGREEMENT
CHATTEL MORTGAGE
================================================================================
TO
================================================================================
DATED,
================================================================================
================================================================================
To perfect lien, file UCC 1 (see UCC Section 9-410)
N.Y.: CONSUMER GOODS OR FARM CONNECTED COLLATERAL:
--resident debtor; with filing officer in county of debtor's residence.
--non resident debtor; Dept. of state: if debtor has a place of
business in only one county in N.Y., also with filing officer of such
county.
--crops: Dept. of state and also with filing officer in county where
land, on which crops are grown, lies.
FIXTURES attached to realty; in county where land lies.
ALL OTHER CASES; Dept. of state: if debtor has a place of business in
only one county in N.Y., also with filing officer in such county.
'filing officer'; in N.Y.C., the City Register of the county:
elsewhere in state, the county clerk.
N.J.: CONSUMER GOODS OR FARM CONNECTED COLLATERAL:
--with clerk or county of debtor's residence.
--if non resident debtor, in county where goods are kept.
--crops: in county where land lies.
FIXTURES attached to realty; with register of county where land
lies or with county clerk if no register.
ALL OTHER COLLATERAL; with secretary of state.
CONN.: FIXTURES attached to realty; with clerk of town or city where land lies.
ALL OTHER COLLATERAL; with secretary of state.
