LOAN AGREEMENT AND SECURITY AGREEMENT
|
Turnersville,
New Jersey
|
February
22, 2005
|
|
|
|
|
BCI
Communications, Inc.
(Exact
Name of Debtor)
|
00-0000000
(Taxpayer
I.D. No.)
|
|
|
|
|
Delaware
Corporation
(Type
& State of Debtor’s formation, e.g., corporation, LLC, partnership,
etc.)
|
(Organization
No.)
|
|
00
Xxxxxx Xxxx
|
Xxxxxxx
Xxxx
|
Xxxxxx
|
Xxx
Xxxxxx
|
|
(No.
and Street Address)
|
(City)
|
(County)
|
(State)
|
The
undersigned debtor (hereinafter referred to as “Borrower”), for good and
valuable consideration, and to induce Presidential Financial Corporation of
Delaware Valley (hereinafter referred to as “Lender”) to accept this agreement
(“Agreement”) and to make the loans and advances described hereunder, hereby
agrees as follows:
1. Request
for Loan. From time to time Borrower may request, and Lender in its
sole discretion may loan Borrower up to: (eighty-one percent (81%) of the amount
of Approved Receivables (as hereinafter defined) submitted by Borrower to
Lender, or (b) One Million Two Hundred Fifty Thousand Dollars and
No Cents ($1,250,000.00), or such greater or lesser amount as Lender
may from time to time establish.
Provided,
however, that the total principal amount of such loans and advances to Borrower
shall not exceed Borrower’s maximum line of credit extended from time to time by
Lender and determined in Lender’s sole discretion. All loans and advances made
by Lender hereunder shall be evidenced by a demand promissory note (hereinafter
the “Note”) executed by Borrower and shall contain such terms as Lender shall
require. “Approved Receivables” as used herein shall mean only such accounts,
contract rights, chattel paper, instruments or general intangibles belonging
to
Borrower as from time to time shall be acceptable to Lender, in its sole
judgment and discretion, in terms of quality and current status. “Value” as used
herein shall mean the lower cost or market value of Inventory.
2. Grant
of Security Interest. To secure the indebtedness evidenced by the
Note together with any extensions or renewals thereof, in whole or in part,
as
well as all other indebtedness, obligations and liabilities of Borrower to
Lender, now existing or hereafter incurred or arising whether direct, indirect
or by way of assignment, whether joint or several, absolute or contingent,
due
or to become due and whether as principal, maker, endorser, surety, guarantor
or
otherwise, or which Lender may now or hereafter have, own or hold (the foregoing
being hereinafter sometimes referred to collectively as the “Obligations”),
Borrower does hereby grant to Lender a security interest in and security title
to the following described property, whether now owned or existing or hereafter
acquired or arising and wherever located:
(a) Receivables.
All of
Borrower’s accounts, accounts receivable, notes receivable, contract rights,
drafts, general intangibles (including but not limited to, software and payment
intangibles), instruments and chattel paper, whether tangible or electronic
(all
of the foregoing being hereinafter collectively referred to as the
“Receivables”);
(b) Accounts
and Securities.
All of
Borrower’s money, deposit accounts, letters of credit, letter of credit rights
and investment property;
(c) Supporting
Obligations.
All
supporting obligations relating to any of the foregoing;
(d) Inventory.
All of
Borrower’s finished goods and inventory, packing and shipping supplies, all
goods intended to be sold or used by Borrower or to be finished by Borrower
under contracts of service, including all raw materials, goods in process,
finished goods, materials and supplies of every kind and nature, used and usable
in connection with the manufacture, shipping, advertising, selling, leasing,
or
furnishing of such goods, all documents evidencing or representing the same
and
all documents of title, all negotiable and non-negotiable warehouse receipts
representing the same and all products, accounts and proceeds resulting from
the
sale or other disposition of the foregoing, that may be rejected, returned,
repossessed or stopped in transit and all other items customarily classified
as
inventory (all the foregoing being hereinafter collectively referred to as
the
“Inventory”);
(e) Furniture,
Fixtures and Equipment.
All of
Borrower’s presently owned and hereafter acquired machinery, furniture, fixtures
and equipment wherever located (all of the foregoing being hereinafter
collectively referred to as the “FF&E”);
(f) Other
Property.
Any and
all other property of any nature whatsoever of Borrower now or hereafter in
the
possession of, assigned to or hypothecated to Lender for any purpose, including,
but not limited to balances, credits, deposits, accounts, items and monies
of
Borrower now or hereafter with Lender and all dividends and distributions on
or
rights in connection with any such property and all rights of Borrower earned
or
to be earned under contracts to sell goods or render services and a lien upon
all accounting books and records of the Borrower; and
(g) Proceeds.
All
substitutions, improvements, accessions, additions, renewals and replacements
of
or to any of the foregoing (including, but not limited to, returned or unearned
premiums from any insurance written in connection with this Agreement) and
all
proceeds of any of the foregoing, including but not limited to, any and all
proceeds in the form of the Receivables and Inventory.
The
foregoing shall hereinafter be collectively referred to as the “Collateral.” The
security interest is granted pursuant to the Uniform Commercial Code of the
State of New Jersey, as amended from time to time (the “Code”).
If
at any
time the Collateral pledged as security for any of the Obligations shall be
or
become unsatisfactory to Lender or should Lender deem itself insecure as to
the
adequacy or sufficiency of such Collateral, Borrower will immediately furnish
such further property as additional Collateral to be held by Lender as if
originally, pledged as Collateral hereunder or make such payment on account
as
will be satisfactory to Lender.
3. Certain
Lender Rights. Whether an event of default shall exist hereunder or
not, Lender shall have, but shall not be limited to the following rights, each
of which may be exercised at any time and from time to time (i) to transfer
the Note and the Collateral, and any transferee shall have all the rights of
Lender hereunder and Lender shall be thereafter relieved from any liability
with
respect to any Collateral so transferred; (ii) to transfer the whole or any
part of the Collateral in the name of itself or its nominees; (iii) to vote
any investment securities forming a part of the Collateral; (iv) to notify
the obligors on any Collateral to make payment directly to Lender of any amount
due thereon; (v) to execute at any time in the name of any party hereof and
to file, without Borrower’s signature, financing statements covering any of the
Collateral or which describe the Collateral as “all assets” or “all property” of
Borrower; (vi) to receive or take control of any income or other proceeds
of any of the Collateral; and (vii) to request and receive current
financial information from any party liable for all or any part of the
Obligations.
4. Lender
Rights as to Receivables. In addition to any other provision
herein, as to Borrower’s Receivables, which are pledged as part of the
Collateral, Lender shall have the following rights and privileges:
(a) Account
Collections.
Lender
will handle the cash collection of the Receivables; however, Borrower will,
at
its own expense, endeavor to collect all amounts due under the Receivables,
including the taking of such action with respect to such collection including,
but not limited to, litigation, as Lender requests or, in the absence of such
request, as Borrower may deem necessary or advisable. Borrower may in the
ordinary course of business grant to any party obligated on Receivables any
rebate or adjustment to which such party may be lawfully entitled, and, may
accept, in connection therewith, the return of goods, the sale or lease of
which
have given rise to such Receivables. Borrower shall promptly notify Lender
of
and shall settle all customer disputes; however, if Lender elects, it shall
have
the right at all times to settle, compromise, adjust or litigate all customer
disputes directly with the customer or other complainant upon such terms and
conditions as Lender deems advisable including but not limited to the right
to
surrender, release or exchange all or any part of any Receivable owed by a
customer to Borrower, and to compromise or extend or renew for any period any
such Receivable, all without incurring liability to Borrower for its performance
of any such acts and Lender hereby shall have the right to stop goods in transit
or to replevy or to reclaim such goods. All returned, replevied and reclaimed
goods (unless released by Lender) coming into Borrower’s possession shall be
held by Borrower in trust for Lender. Borrower shall notify Lender promptly
of
all such returned goods and shall promptly pay to Lender the gross amount of
the
unpaid Receivables with respect thereto.
2
If
any
Receivable is not paid within ninety-one (91) days from the date of the invoice
with respect thereto, or if any customer raises any claim of non-conformity
of
goods, total or partial failure of delivery, set off, counterclaim, or breach
of
warranty or any other claim inconsistent with Borrower’s warranties as made
below, Borrower will upon demand pay Lender the gross amount of the Receivable
so affected or unpaid, together with any damages or loss sustained by Lender
and
any accrued but unpaid interest, fees, or other charges due Lender; provided,
however, such payment may not be deemed a release of Lender’s security interest
therein nor a release thereof and security title thereto and to the goods
represented thereby shall remain in Lender until and unless Lender executes
a
release. Lender may, at any time and from time to time, notify any parties
obligated on any of the Receivables to make payment directly to Lender of any
amount due or to become due there under, and enforce collection of any of the
Receivables by suit or otherwise, as hereinabove provided. Upon request of
Lender, Borrower will, at its own expense, notify any parties obligated on
any
of the Receivables to make payment directly to Lender of any amounts due or
to
become due there under.
Borrower
hereby appoints and constitutes Lender as Borrower’s attorney-in-fact to
receive, open, and in Lender’s sole discretion, dispose of all mail addressed to
Borrower in order to fully protect Lender’s interest in the Collateral; to
notify the postal authorities to change the address and delivery of mail
addressed to Borrower to such address as Lender may designate; to endorse
Borrower’s name upon any notes, acceptances, checks, drafts, money orders and
other evidences of payment of Collateral that may come into Lender’s possession
and to deposit or otherwise collect the same; to sign Borrower’s name on any
xxxx of lading relating to any Collateral, on drafts against customers, listing
of Receivables, and notices to customers; to prepare and mail invoices to
Borrower’s customers; to send verification of accounts to customers; to execute
in Borrower’s name any affidavits and notices with regard to any and all lien
rights, and to do all other acts and things necessary or helpful to carry out
this Agreement or to deal with the Collateral or proceeds thereof in its own
name or in the name of Borrower. All acts of said attorney-in-fact are hereby
ratified. This power, being coupled with an interest, is irrevocable while
Borrower is indebted to Lender under any of the Obligations.
(b) Remittance
by Borrower
Unless
Lender shall otherwise consent in writing, Borrower will forthwith upon receipt,
transfer and deliver to Lender in the form received, all cash, checks, chattel
paper, drafts, items or other instruments for the payment of money (properly
endorsed where required, so that items may be collected by Lender) which may
be
received by Borrower at any time in full or partial payment or otherwise as
proceeds of any Collateral. Unless Lender shall otherwise consent in writing,
any such items which may be thus received by Borrower shall not be commingled
with any other of Borrower’s funds or property, but will be held separate and
apart from its own funds or property and upon express trust for Lender until
delivery is made to Lender. Borrower shall comply with the terms and conditions
of any consent given by Lender pursuant to the provisions of this paragraph.
Checks, drafts, wire and other electronic transfers, and any other non-cash
instrument for the payment of money shall be credited to the Note on the second
business day after the day of receipt by Lender, if a business day, or if not
a
business day, on the first business following receipt. The excess of amounts
actually collected by Lender from the proceeds of the Collateral over the
amounts under the Note currently owing to Lender for loans, advances, interest
and fees there under and hereunder, shall be paid by Lender from time to time
to
Borrower in such order of application as Lender may elect, periodically, but
in
no event less frequently than monthly. Lender shall deliver to Borrower a
statement of account, such statement shall be binding, and conclusive upon
Borrower unless Borrower notifies Lender to the contrary within (10) days after
the date of each statement is rendered.
3
(c) Billing
Customers to Borrower.
Billing
on invoices by whomever done shall be conclusive evidence of assignment and
transfer hereunder to Lender of the Collateral represented thereby whether
or
not Borrower executes any document of transfer in regard thereto.
(d) Additional
Representations and Warranties.
Borrower hereby represents and warrants to Lender that the Receivables will
be,
at the time of their creation, bona fide and existing obligations of Borrower’s
customers arising out of the sale of goods and/or rendition of services by
Borrower and are owned by and owed to Borrower without defense, offset, or
counterclaim; that with regard to each Receivable as it arises Borrower will
have made delivery of the goods or will have rendered the services ordered,
and
the customer will have accepted the goods and/or services.
5. Lender
Rights as to Inventory. In addition to any other provisions herein,
as to Borrower’s Inventory, which is pledged as a part of the Collateral, Lender
shall have the following rights and privileges:
(a) Pay
down on Sale.
Borrower shall pay to Lender concurrently with each sale of Inventory an amount
equivalent to the Value of Inventory (as defined herein) sold, or shall
substitute other Inventory (acceptable as security to Lender) designated in
written statements signed and delivered to Lender by Borrower, of a Value that,
in the opinion of Lender, equals at least the Value of such sold Inventory.
If
at any time the aggregate amount of outstanding loans under this Agreement
exceeds the Value of Inventory then acceptable to Lender, Borrower will,
immediately upon demand, repay sufficient of the loans made to it by Lender
hereunder so that said ratio of loan to Value is re-established or give to
Lender a security interest in other Inventory acceptable to Lender of a
sufficient Value to accomplish that result.
(b) Additional
Representations and Warranties.
Borrower represents and warrants to and covenants and agrees with Lender that
(except as otherwise specified in the Agreement): (i) Inventory shall be
kept only at the following location) _______________________ and Borrower will
promptly notify Lender in writing of any change in location of any place of
business or of the Inventory , or the establishment of any new place of
business; (ii) immediately upon each demand by Lender therefore, Borrower
shall execute and deliver to Lender designations of Inventory specifying
Borrower’s cost of inventory, the market value thereof and such other matters
and information relating to Inventory as Lender may from time to time request;
(iii) Borrower now keeps and shall keep correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory,
Borrower’s cost therefore and the selling price thereof, the daily withdrawals
there from and the additions thereto; (iv) all Inventory is and shall be
new Inventory of goods and shall be of merchantable quality, free from defects;
(v) Inventory is not and shall not be stored with a bailee, warehouseman or
similar party without Lender’s prior written consent and in such event, Borrower
will, concurrently with delivery to such party, cause any such party to issue
and deliver to Lender, in form acceptable to Lender, warehouse receipts in
Lender’s name evidencing the storage of such Inventory; (vi) Lender and its
agents and representatives may, upon demand, during Borrower’s usual business
hours: (1) inspect and examine Inventory and check and test the same as to
quality, quantity, value and condition; and (2) inspect, audit, check and
make extracts from the books, records, journals, orders, receipts,
correspondence and other data relating to Borrower’s Inventory or to any other
transaction between the parties hereto; and (vii) that Borrower’s Inventory
shall not be subject to any security interest, lien or encumbrances except
in
favor of Lender hereunder.
(c) Revisions.
Borrower agrees that the percentage of Value advanced, the acceptability and
Value of Inventory and the period during which such advances are to remain
outstanding are and shall be entirely in Lender’s sole discretion and that the
Lender shall have the right at any time to revise any limit placed by Lender
upon the amount of such advances or upon the valuation of Inventory or Lender
may, in its sole discretion, refuse to make further advances. If Inventory
remains in stock for a period of time which Lender in its sole judgment deems
excessive, such Inventory may, at Lender’s option, be considered to be of no
Value for the purposes of loans or advances although the same remains in stock
and Lender retains its lien thereon according to the terms and provisions of
this Agreement.
(d) Sale
of Inventory.
Until a
default by Borrower, Borrower may, subject to the provisions of this Agreement,
and not in a manner inconsistent therewith or unlawful, sell finished Inventory,
but only in the ordinary course of Borrower’s business; however, in no event
shall Borrower make any sale of Inventory which would cause a breach of
Borrower’s warranties, representations and covenants under Section 5(b) of
this Agreement. A sale of Inventory in the ordinary course of Borrower’s
business does not include a transfer in partial or total satisfaction of a
debt
owing by Borrower. Borrower shall report the receipt or creation of all sales
or
other dispositions of Inventory to Lender and promptly deliver such proceeds
to
Lender. Borrower shall execute and deliver to Lender, in form satisfactory
to
Lender, a formal assignment or schedule of accounts receivable or other proceeds
resulting from the sale or other disposition of Inventory but in the absence
of
such assignment or schedule, this Agreement shall constitute such assignment
or
schedule and the grant of a security interest therein. Lender’s security
interest hereunder shall attach to all proceeds (whether represented by cash,
checks, drafts, notes, chattel paper, open accounts or otherwise) of all sales
or other dispositions of Borrower’s Inventory.
4
(e) Release.
Lender
shall not be liable or responsible for and Borrower hereby releases Lender
from
any and all causes of action or claims which Borrower may now or hereafter
have
for any loss or damage to it claimed to be caused by or arising from:
(i) the safekeeping of Inventory; (ii) any damage thereto occurring or
arising in any manner or fashion from any cause; (iii) any diminution in
the value of Inventory; or (iv) any act of default of any carrier,
warehouseman, bailee or forwarding agency thereof or other person whomsoever.
All risk of loss, damage or destruction of Inventory shall be borne by
Borrower.
6. Insurance.
Borrower shall keep the Collateral fully insured against fire, theft and other
casualty (as well as such other risks as Lender may hereafter request) with
loss
payable to Lender and shall pay all premiums promptly when same become due.
Lender shall have the right to require Borrower to maintain such insurance
with
such companies and in such amounts as Lender may request. All policies of
insurance will specify that such insurance shall not be cancelable by Borrower
or the insurer without at least ten (10) days advance written notice to Lender.
In the event any or all insurance hereinbefore provided is cancelled, any
returned premium thereon shall be payable to Lender and may be applied by Lender
to any part of the Obligations, whether matured or unmatured. Lender is
authorized to receive the proceeds of any insurance loss and at the option
of
Lender shall apply such proceeds toward either the repair or replacement of
the
Collateral or the payment of the Obligations secured hereby. If Borrower fails
to maintain such insurance, Lender may, at its option, but without obligation,
purchase such insurance or pay any premium owing and any such sum paid by Lender
shall be payable by Borrower on demand by Lender or at Lender’s option may be
added to any of the Obligations.
7. Warranties
of Borrower. Borrower hereby represents and warrants to Lender that
the Collateral is now and will be kept free and clear of any and all liens,
security interests and encumbrances whatsoever, other than the security interest
hereunder, that Borrower has and will have the right to convey the Collateral
as
security for the Obligations; that Borrower will accurately and timely prepare
and file any and all payroll, income, sales, franchise and any other applicable
tax returns and pay or remit any taxes due therewith; that Borrower will
promptly pay or discharge all taxes assessed against the Collateral and all
liens which may attach thereto; that any and all information set forth in any
writing heretofore or hereafter delivered to Lender by Borrower pertaining
to
the Collateral or Obligations is and will be true and correct as of the date
thereof; that Borrower is solvent; if a registered organization (as defined
in
the Code) that Borrower is duly formed or organized as the type of organization
set forth above and is validly existing under the laws of the State of its
formation or incorporation as set forth above, is duly qualified and in good
standing in every other state in which it is doing business as a registered
organization and its exact name and organization number are as set forth above;
that the execution, delivery and performance hereof are within Borrower’s
corporate or company powers, have been duly authorized, are not in contravention
of law or the terms of Borrower’s charter, bylaws or other incorporation or
formation documents, or of any indenture, agreement or undertaking to which
Borrower is a party or by which it is bound; that without prior written notice
to Lender, Borrower will not obtain any loans, advances or financial
accommodations or arrangements from any party other than Lender and will not
encumber any of its assets; that without prior written consent of Lender,
Borrower will not change its name, reorganize, merge or consolidate, change
its
jurisdiction of incorporation or formation or issue or sell or redeem any of
its
common stock or other ownership interests, or permit the transfer by the present
shareholders of Borrower to any other person or entity any or all of the common
stock or other ownership interests of Borrower outstanding or in treasury as
of
the date hereof; that in the event of any transfer by operation of law, Borrower
shall immediately notify Lender; that there is no order, notice, claim,
litigation, proceedings or investigation pending or threatened against or
affecting Borrower whether or not covered by insurance, that would materially
and adversely affect Borrower’s operations, financial condition, property or
business; that Borrower will not sell, transfer, lease or otherwise dispose
of
all or (except in the ordinary course of business) any material part of its
assets; that no account arises out of a contract with, or order from, an account
debtor that, by its terms, forbids assignment or makes the assignment of that
account to Lender void or unenforceable; that the representations and warranties
made hereunder by Borrower are true on the date hereof and will be true on
the
date of such loan advance by Lender hereunder; that Borrower’s address as shown
above is the location of Borrower’s principal place of business, that such place
of business is Borrower’s only place of business, and that Borrower has not
maintained any other place of business or principal place of business or
corporate or trade name during the five (5) years immediately preceding the
date
of the execution of this Agreement, unless having notified Lender in writing
of
all such previous addresses and names.
5
8. Duties
and Further Assurances of Borrower. Borrower covenants and agrees
that, so long as any of the Obligations remain outstanding and unpaid, it
shall:
(a) Financing
Statements
-
Execute upon request of Lender such financing statements and other documents
and
pay the cost of filing or recording the same, and do such other acts and things
as Lender may from time to time request to establish and maintain a valid and
perfected security of Lender in the Collateral;
(b) Control
Agreements
-
Deliver to Lender such agreements giving Lender “control,” as defined in the
Code, of any investment property, deposit accounts, letters of credit or
electronic chattel paper as Lender may request, with each such agreement being
in form and substance satisfactory to Lender;
(c) Tort
Claims
- In the
event the Borrower obtains a “commercial tort claim” (as defined in the Code),
the Borrower shall immediately notify Lender and pledge such commercial tort
claim to the Lender pursuant to a supplement to this Agreement, such supplement
to be in form and substance satisfactory to the Lender;
(d) Inspection
- Permit
Lender, its agents and employees, from time to time, to inspect, audit and
make
copies of and extract from all records and other papers in the possession of
Borrower, including but not limited to those pertaining to the Collateral and
Borrower’s debtors, and upon request of Lender, all such records and papers,
including copies of customer invoices and exclusive evidence of shipment and
such other documents and proof of delivery/rendition as Lender may at any time
require;
(e) Financial
Statements
-
Furnish to Lender on or before the forty-fifth (45th)
day
after the end of each month, financial statements in form and substance
satisfactory to Lender and certified by an appropriate officer or representative
of Borrower, and furnish to Lender annually on or before the sixtieth
(60th)
day
after the end of Borrower’s fiscal year, a financial statement in form and
substance satisfactory to Lender and certified after audit by an independent
certified public accountant acceptable to Lender, with all such reports to
be
prepared in accordance with Generally Accepted Accounting Principles,
consistently applied.
(f) Records
Retention
- Keep
at its address shown herein its records concerning the Collateral, which records
shall be of such character as will enable Lender to determine at any time the
status of the Collateral;
(g) Information
-
Furnish such information and documents concerning Borrower, the Collateral
and
Borrower’s debtors as Lender may from time to time request;
(h) Payment
of Charges against Collateral
-
Borrower shall pay all taxes and other charges against the Collateral promptly
when it becomes due. Should Borrower fail to pay any such taxes or other
charges, Lender may, at its option, pay any such amount owing and any such
sum
paid by Lender shall be payable by Borrower on demand by Lender or, at Lender’s
option, may be added to any of the Obligations; and
(i) Closing
Costs
-
Borrower will pay all costs of closing the loan, which is the subject of this
Agreement and will reimburse Lender during the period of financing hereunder
for
all out-of-pocket or advanced expenses, including but not limited to, long
distance phone calls and travel expenses.
6
9. Default
and Remedies. Upon the occurrence of any one or more of the
following: (i) any failure of any Obligor (which term shall include
Borrower, any co-borrower, and each endorser, surety or guarantor of the Note)
to pay any of the Obligations when due or to observe or perform any agreement,
covenant or promise hereunder or in any other agreement, note, instrument or
certificate of any Obligor to Lender, now existing or hereafter executed in
connection with any of the Obligations, including, but not limited to, a loan
agreement, if applicable, and any agreement guaranteeing payment of any of
the
Obligations; (ii) any default of any Obligor in the payment or performance
of any other liabilities, indebtedness or obligations of any Obligor to any
other creditor, or any occurrence which would allow or permit any other
liabilities, indebtedness or obligations to any other creditor be accelerated;
(iii) any failure of any Obligor to furnish Lender current financial
information upon request; (iv) any failure of any Obligor or any pledgor of
any security interest in the Collateral (the “Pledgor”) to observe or perform
any agreement, covenant or promise contained in any agreement, instrument or
certificate executed in connection with the granting of security interest in
any
Collateral to secure the Obligations; (v) any warranty, representation or
statement made or furnished to Lender by or on behalf of any Obligor in
connection with the extension of credit evidenced by the Note proving to have
been false in any material respect when made or furnished; (vi) any loss,
theft, substantial damage, destruction, sale, foreclosure of or encumbrance
to
any of the Collateral, or the making of any levy, seizure or attachment thereof
or thereon or the rendering of any judgment or lien or garnishment or attachment
against any Obligor or its property, whether actual or threatened;
(vii) the death, dissolution, termination of existence, insolvency,
business failure, appointment of a receiver of any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding under any bankruptcy or insolvency laws, state or federal, by or
against Borrower or any other Obligor; (viii) any discontinuance or
termination of any guaranty of any of the Obligations by a guarantor;
(ix) any amendment or termination of a financing agreement naming the
Borrower as debtor and the Lender as secured party, or any corrective statement
with respect thereto, is filed with the prior written consent of the Lender;
(x) any Receivable remaining unpaid for a period of ninety-one (91) days
from the date of any advance under the Note with respect thereto; (xi) if
the Collateral declines in value or for any reason becomes insufficient in
Lender’s sole and exclusive judgment to secure the repayment of the Obligations
and Borrower, after demand, fails or refuses to substitute and/or make additions
to the Collateral, or pay down the Obligations satisfactory to Lender; or
(xii)Lender deeming itself insecure as to the ability of Borrower to repay
the
Obligations, or as to the sufficiency of the Collateral, thereupon, or at any
time thereafter, Lender at its option may terminate any obligation to extend
any
additional credit, make additional advances or make any other financial
accommodation to Borrower and/or may declare all of the Obligations to be due
and payable and Lender may exercise any other rights of Lender under the Note
or
any other agreement with any Obligor or any Pledgor, or the remedies of a
secured party under the Code, including, without limitation thereto, the right
to take possession of the Collateral, or the proceeds thereof and to sell or
otherwise dispose of the same, and for this purpose, to sign in the name of
any
Obligor any transfer, conveyance or instrument necessary or appropriate in
order
for Lender to sell or dispose of any of the Collateral, and Lender may, so
far
as the Borrower can give authority therefore, enter upon the premises on which
the Collateral or any part thereof may be situated and remove the same there
from, without being liable in any way to any Obligor on account of entering
premises. Lender may require Borrower to assemble the Collateral and make the
Collateral available to Lender at a place to be designated by Lender, which
is
reasonably convenient to both parties. Furthermore, Lender shall be entitled
to
(and each Obligor hereby consents to) the immediate issuance of a writ of
possession with respect to al personality items of Collateral in any Obligor’s
possession. Unless the Collateral is perishable, threatens to decline speedily
in value, or is of a type customarily sold on a recognized market, Lender shall
give Borrower written notice of the time and place of any public sale thereof
or
of the time after which any private sale or other intended disposition thereof
is to be made. The requirement of sending reasonable notice shall be met if
such
notice is mailed, postage prepaid, or otherwise given, to Borrower at the
address shown on Lender’s records at least (5) days before such disposition. In
the event of a sale of the Collateral, Lender may bid upon or become purchaser
at any such sale, if public, free from any right of redemption, which is hereby
expressly waived by Borrower, and Lender shall have the right at its option
to
apply or be credited with the amount of all or any part of the Obligations
owing
to the Lender against the purchase price bid by Lender at any such sale. The
net
cash proceeds resulting from the collection, liquidation, sale, lease or other
disposition of the Collateral shall be applied first to the expenses (including
all attorney’s fees) of retaking, holding, storing, processing and preparation
for sale, selling, collecting, liquidating and the like, and then to the
satisfaction of all Obligations, with application as to particular Obligations
or against principal or interest to be in Lender’s sole and absolute discretion.
The Borrower shall be liable to Lender and shall pay to Lender on demand, any
deficiency which may remain after such sale, disposition, collection or
liquidation of the Collateral, and Lender, in turn, agrees to remit to Borrower
any surplus remaining after all Obligations have been paid in full. If any
Obligation (including but not limited to the Note) is a demand instrument,
the
statement of a maturity date or the recitation of defaults and the right of
Lender to declare any Obligation due and payable shall not constitute an
election by Lender to waive its right to demand payment under a demand at any
time and in any event as Lender in its sole discretion may deem appropriate.
The
rights of Lender specified herein shall be in addition to, and not in limitation
of Lender’s rights under the Code, or any other statue or rules of law
conferring rights similar to those conferred by the Code, and under the
provisions of any other instrument or agreement executed by Borrower, any other
Obligor or any Pledgor to Lender. Any rights or remedies of Lender may be
exercised or taken in any order or sequence whatsoever, at the sole option
of
Lender. No waiver by Lender of any default shall be effective unless in writing
nor operate as a waiver of any other default or of the same default on a future
occasion.
7
10. Minimum
Payment. In consideration of Lender extending to Borrower a line of
credit of up to $1,250,000.00, Borrower agrees to pay a minimum monthly service
charge of $1,500.00.
|
Initial:_______________________
|
11. Business
Use. Borrower represents and warrants that Lender’s loan or loans
to Borrower will be used for nonconsumer purposes and not for personal, family
or household purposes.
12. Subordination.
All present and future Shareholder and Investor indebtedness owed by Borrower
to
its Shareholders and Investors shall be subordinated to Lender and will not
be
repaid in whole or in part without the written consent of Lender.
13. Miscellaneous.
The security agreement set forth herein and the security interest in and
security title to the Collateral created hereby shall terminate only when all
of
the Obligations have been indefeasibly paid in full and such payments are no
longer subject to rescission, recovery or repayment upon the bankruptcy,
insolvency, reorganization, moratorium, receivership or similar proceeding
affecting Borrower, any Obligor, or any other person. All rights of Lender
hereunder shall inure to the benefit of its successors and assigns, and all
obligations of Borrower shall bind the heirs, legal representatives, successors
and assigns of Borrower, provided, however, Borrower shall have no right to
assign its rights or obligations under this Agreement without having first
received the prior written consent of Lender. Borrower and each endorser, surety
or guarantor of the Note, whether bound by this or by separate instrument or
agreement, shall be jointly and severally liable for the indebtedness evidenced
by the Note and hereby jointly and severally (i) waive presentment for
payment, demand, protest, notice of nonpayment or dishonor and any and all
other
notices and demands whatsoever; (ii) consent that at any time, or from time
to time, payment of any sum payable under the Note may be extended by Lender
without notice whether for a definite or indefinite time; (iii) agree to
remain liable until all of the Obligations are paid in full notwithstanding
any
release or transfer of Collateral by Lender or of any extension, modification
or
renewal; and (iv) consent to the exercise of personal jurisdiction over
each Obligor by the State Court of Bergen County in the State of New Jersey
and
hereby consents to the laying of venue in any jurisdiction or locality in the
State of New Jersey. No conduct of Lender shall be deemed a waiver or release
of
such liability, unless the holder expressly releases such party in writing.
In
the event the Obligations evidenced hereby are collected by or through an
attorney or Lender following a default hereunder, Lender shall be entitled
to
recover reasonable attorneys’ fees and all other costs and expenses of
collection. Time is of the essence. This Agreement, and the rights and
obligations of the parties hereunder, shall be governed and construed in
accordance with the laws of the State of New Jersey. This Agreement and the
documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties, and may be amended only by a writing signed
on
behalf of the party sought to be charged. If any provision of this Agreement
shall be held invalid under any applicable laws, such invalidity shall not
affect any other provision of this Agreement that can be given effect without
the invalid provision, and to this end, the provisions hereof are severable.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute but
the
same instrument. Terms used in this Agreement, which are defined in the Code,
shall have the meanings given such terms in the Code unless the context requires
otherwise.
8
IN
WITNESS WHEREOF, Borrower and Lender have executed this Agreement under seal
this 22nd
day of February, 2005.
| ATTEST: | |||
| By: | /s/ Xxxx X. Xxxxxx | BORROWER:
BCI
Communications, Inc.
|
|
|
|
|
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxx | ||
|
Xxxxxxx X. Xxxxxxxx, President/CEO |
|||
|
LENDER:
PRESIDENTIAL
FINANCIAL CORPORATION OF
DELAWARE
VALLEY
|
|||
|
|
|||
| By: | /s/ Xxxxxx X. Xxxxxxx, Xx. | ||
|
Xxxxxx X. Xxxxxxx, Xx.,
President
|
|||
9
