Exhibit 10(n)
COMPOSITE MODIFICATION AGREEMENT
THIS COMPOSITE MODIFICATION ("Modification Agreement") dated as of January
1, 1996 between ELECTRO-CATHETER CORPORATION, a New Jersey corporation with
offices at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Borrower") and THE T
PARTNERSHIP, a New Jersey partnership with offices c/o Wiss & Co., 000
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Lender"),
WITNESSETH:
WHEREAS, the Borrower and the Lender entered into a Lending Agreement
("Lending Agreement") dated August 31, 1995, whereby the Lender has loaned to
the Borrower the sum of One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00) ("Loan"); and WHEREAS, to evidence such indebtedness the
Borrower issued a 12% Debenture ("Debenture") to the Lender dated August 31,
1995; and WHEREAS, the Borrower and the Lender entered into a Security Agreement
("Security Agreement") dated as of August 31, 1995, to secure the due and
punctual payment and performance of all obligations of the Borrower under the
Loan Documents (as such term is defined in the Lending Agreement); and
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WHEREAS, the obligations of the Borrower under the Loan Documents are
further secured by a Mortgage ("Mortgage") dated October 31, 1995, which
Mortgage is a first lien mortgage on Borrower's real property located in the
City of Rahway, County of Union, State of New Jersey, commonly known and
designated as 0000 Xxxxxx Xxxxx; and WHEREAS, the Borrower and the Lender have
agreed to modify the Loan Documents on certain terms and conditions as
hereinafter provided. NOW, THEREFORE, the parties hereto do hereby agree as
follows: 1. LOAN. The Lender agrees to lend additional sums to the Borrower
consisting of (i) One Hundred Thousand and 00/100 Dollars ($100,000.00) advanced
at or prior to execution of this Modification Agreement, (ii) a deferral of
interest payments on all indebtedness under the Debenture on January 1, 1996,
February 1, 1996 and March 1, 1996 (such deferred interest to be added to
principal) and (iii) at the sole discretion of the Lender, additional sums, for
total current new advances (including deferred interest) up to a maximum of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) ("Current New
Advances"). The Lender shall have no obligation to make further advances at any
time after an event of default ("Event of Default") by the Borrower of any of
its obligations under the Loan Documents, but if and when the Lender
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shall make additional advances (up to Current New Advances), the terms of
the Loan Documents, Mortgage and this Modification Agreement shall be applicable
to all such advances. 2. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are
hereby modified and amended as follows: (a) Principal Amount of Loan. All
references to the sum One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00) in the Loan Documents and Mortgage shall be deleted in its
entirety and substituted in its place and stead shall be the sum of all advances
up to One Million Seven Hundred Fifty Thousand and 00/100 Dollars
($1,750,000.00). (b) Events of Default. The following shall constitute an
additional Event of Default under the Loan Documents: (i) The sum ("Borrowing
Base") of the following as of the last day of any month shall be less than Three
Million and 00/100 Dollars ($3,000,000.00): (a) Borrower's accounts receivables
and inventory, as carried on Borrower's books and records in accordance with
Borrower's customary accounting procedures consistently applied; (b) the amount
of any principal due Lender repaid subsequent to January 1, 1996; and
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(c) any cash maintained as security for Lender in a segregated account
under terms satisfactory to Lender. (ii) Any default by Borrower of its
obligations under this Modification Agreement and any documents delivered in
conjunction therewith. (c) Remedies Upon Default. As a limitation on the
remedies upon default set forth in the Loan Documents, the Lender hereby agrees
it will not take action to enforce any remedy available to it for a period of
thirty (30) days after it has provided written notice of a declaration of
default unless such default is declared on account of bankruptcy, in which event
this provision shall not be applicable. (d) Additional Composite Modifications.
References in any Loan Document to the Debenture, Mortgage or Lending Agreement
shall be deemed to refer to respectively the Amended and Restated Debenture, the
Mortgage as modified by the Amended Mortgage and the Lending Agreement as
modified by this Modification Agreement. 3. CONTINUED VALIDITY OF ORIGINAL LOAN
DOCUMENTATION. Except as otherwise provided herein, the Loan Documents shall
continue in full force and effect, in accordance with their respective terms,
and the parties hereto hereby expressly ratify, confirm and reaffirm all of
their respective liabilities, obligations, duties and responsibilities under and
pursuant to the Loan Documents, as modified by this Modification Agreement,
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and Borrower agrees that the same shall constitute valid and binding
agreements of Borrower, enforceable in accordance with their respective terms.
4. MODIFICATION AGREEMENT CONTROLS. In the event of a conflict between the terms
and conditions of this Modification Agreement and the terms and conditions of
the Loan Documents, the terms and conditions of this Modification Agreement
shall control. 5. NO NOVATION. This Modification Agreement does not represent
new indebtedness (except to the extent of the Current New Advances) and does not
in any way represent satisfaction of the indebtedness. It is the intention of
the parties hereto that this Modification Agreement shall not constitute a
novation and shall in no way adversely affect or impair the lien priority of the
Mortgage, the Security Agreement or any other instrument securing the Loan. 6.
REPAYMENT OF CURRENT NEW ADVANCES. This Modification Agreement and the documents
executed in conjunction therewith shall be deemed null and void if the Borrower
repays the Current New Advances within thirty (30) days of the date first
written above. 7. ADDITIONAL DELIVERIES. Borrower is delivering to Lender
simultaneously herewith a substitute Amended and Restated Debenture and
Amendment to Mortgage.The T-Partnership shall return to Borrower within 45 days
of the date of this Modification Agreement the Debenture.
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IN WITNESS WHEREOF, the parties have executed this Modification Agreement
as of the date first above written. ELECTRO-CATHETER CORPORATION
By:/s/Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx,
Acting President
THE T PARTNERSHIP
By:/s/ A. H. Nechemie
Partner
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AMENDMENT TO MORTGAGE
THIS AMENDMENT TO MORTGAGE ("Amendment"), made as of the 1st day of
January, 1996, by and between ELECTRO-CATHETER CORPORATION, a New Jersey
corporation, with offices at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 (the
"Mortgagor"), and THE T PARTNERSHIP with offices c/o Wiss & Company, 000
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the "Mortgagee"),
WITNESSETH:
WHEREAS, the Mortgagee is the holder of a certain Debenture (the
"Debenture") dated August 31, 1995, issued by the Mortgagor to the Mortgagee in
the principal amount of One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00) (the "Loan"); and
WHEREAS, the Debenture is secured by a Mortgage (the "Mortgage") dated
October 31, 1995, which Mortgage is a first lien mortgage on Mortgagor's real
property located in the City of Rahway, County of Union, State of New Jersey,
commonly known and designated as 0000 Xxxxxx Xxxxx (the "Mortgaged Premises");
and
WHEREAS, the Debenture is further secured by a Security Agreement (the
"Security Agreement") dated as of August 31, 1995; and
WHEREAS, the Mortgagor has requested the Mortgagee advance additional sums,
and otherwise modify the Debenture and Mortgage; and
WHEREAS, the Mortgagee is willing to advance additional sums to the
Mortgagor, and otherwise modify the Debenture on certain terms and conditions as
provided in the Amended and Restated Debenture dated January 1, 1996 and modify
the Mortgage on certain terms and conditions as hereinafter provided.
NOW, THEREFORE, for and in consideration of the Mortgaged Premises (which
are deemed herein contained) and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. PRINCIPAL AMOUNT OF LOAN.
The Mortgagor acknowledges that it may receive advances under the Amended
and Restated Debenture up to the sum of One Million Seven Hundred Fifty Thousand
and 00/100 Dollars ($1,750,000.00). The Mortgagor hereby represents, warrants
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and confirms that there are no set-offs, rights, claims or causes of action of
any nature whatsoever which the Mortgagor has or may assert against the
Mortgagee with respect to the Debenture, the Mortgage or the other Loan
Documents.
2. MODIFICATION OF MORTGAGE.
The Mortgage is hereby modified and amended as follows:
(a) Principal Amount of Loan. All references to the sum One Million Five
Hundred Thousand and 00/100 Dollars ($1,500,000.00) in the Mortgage shall be
deleted in its entirety and substituted in its place and stead shall be the sum
of all advances made by Mortgagee to Mortgagor up to One Million Seven Hundred
Fifty Thousand and 00/100 Dollars ($1,750,000.00).
(b) Debenture. References in the Mortgage to the Debenture shall be deemed
references to the Amended and Restated Debenture dated January 1, 1996.
(c) Events of Default. The following shall constitute additional Events of
Default under the Mortgage:
(i) The default by Mortgagor of any obligation under the Amended
and Restated Debenture dated January 1, 1996.
(ii) The sum ("Borrowing Base") of the following as of the last day of
any month shall be less than Three Million and 00/100 Dollars ($3,000,000.00):
(a) Mortgagor's accounts receivables and inventory, as carried
on Mortgagor's books and records in accordance with Mortgagor's customary
accounting procedures consistently applied;
(b) the amount of any principal due Mortgagee repaid subsequent
to January 1, 1996; and
(c) any cash maintained as security for Mortgagee in a segregated
account under terms satisfactory to Mortgagee.
(iii) Any default by Mortgagor of its obligations under this Amendment
and any documents delivered in conjunction therewith.
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(c) Remedies Upon Default. As a limitation on the remedies upon default set
forth in the Mortgage, the Mortgagee hereby agrees it will not take action to
enforce any remedy available to it for a period of thirty (30) days after it has
provided written notice of a declaration of default unless such default is
declared on account of bankruptcy, in which event this provision shall not be
applicable.
3. CONTINUED VALIDITY OF ORIGINAL LOAN DOCUMENTATION.
Except as otherwise provided herein, the Mortgage shall continue in full
force and effect, in accordance with its respective terms, and the parties
hereto hereby expressly ratify, confirm and reaffirm all of their respective
liabilities, obligations, duties and responsibilities under and pursuant to the
Mortgage, as modified by this Amendment, and Mortgagor agrees that the same
shall constitute valid and binding agreements of Mortgagor, enforceable in
accordance with its respective terms.
4. AMENDMENT CONTROLS.
In the event of a conflict between the terms and conditions of this
Amendment and the terms and conditions of the Mortgage, the terms and conditions
of this Amendment shall control.
5. NO NOVATION.
This Amendment does not represent new indebtedness (except to the extent of
the Current New Advances as such term in defined in the Composite Modification
Agreement) and does not in any way represent satisfaction of the indebtedness.
It is the intention of the parties hereto that this Amendment shall not
constitute a novation and shall in no way adversely affect or impair the lien
priority of the Mortgage, the Security Agreement or any other instrument
securing the Loan.
6. REPAYMENT OF CURRENT NEW ADVANCES.
This Amendment and the documents executed in conjunction therewith shall be
deemed null and void if the Mortgagor repays the Current New Advances within
thirty (30) days of the date first written above.
7. ADDITIONAL DELIVERIES.
Mortgagor is delivering to Mortgagee simultaneously herewith a Composite
Modification Agreement and a substitute Amended and Restated Debenture.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
WITNESS: MORTGAGOR:
ELECTRO-CATHETER CORPORATION
/s/Xxxxxx X. Xxxx /s/ Xxxxx Xxxxxxxxxx
Xxxxx Xxxxxxxxxx,
Acting President
ATTEST: MORTGAGEE:
THE T PARTNERSHIP
_________________________ By: /s/ A. H. Nechemie
Partner
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ELECTRO-CATHETER CORPORATION
12% AMENDED AND RESTATED DEBENTURE DUE AUGUST 1, 2001
Date of Issuance: January 1, 1996
$1,750,000
ELECTRO-CATHETER CORPORATION, a New Jersey corporation, (hereinafter called
the "Company"), for value received, promises to pay to THE T PARTNERSHIP or
registered assigns (the "Registered Holder" hereof) on August 1, 2001 (the
"Maturity Date") at the offices of the Company, the principal amount of all
advances made by The T Partnership to the Company up to One Million Seven
Hundred Fifty Thousand and 00/100 Dollars ($1,750,000) (less any amount
theretofore repaid pursuant to (ii) below) in lawful money of the United States
of America, and to pay at the offices of The T Partnership in like money (i)
interest (computed on the basis of a thirty (30) day month, three hundred and
sixty (360) day year) on the unpaid principal amount from the date of the
advance at a rate of twelve percent (12%) per annum, payable on the first day of
each month in arrears (the "Payment Date(s)") until the principal hereof is
paid, and (ii) principal, in installments of Twenty-Five Thousand and 00/100
Dollars ($25,000.00) on the first day of each month commencing September 1, 1996
until August 1, 2001, at which time all remaining principal and interest shall
be repaid in full.
This Amended and Restated Debenture has been issued pursuant to a Lending
Agreement (the "Loan Agreement") dated as of August 31, 1995 between the Company
and The T Partnership and a Composite Modification Agreement ("Modification
Agreement") dated as of January 1, 1996 between the Company and The T
Partnership.
This Amended and Restated Debenture is registered as to both principal and
interest at the principal office of the Company.
This Amended and Restated Debenture is further subject to the following
provisions.
1. Interest and Principal. Interest and principal (when due) on the Amended
and Restated Debenture shall be payable on each Payment Date to the Registered
Holder of this Amended and Restated Debenture as of the close of business on the
day immediately preceding each Interest Payment Date.
2. Transfer; Exchange. The Registered Holder may transfer this Amended and
Restated Debenture upon surrender of this Amended and Restated Debenture at the
principal office of the Company, and, in such event, the Company shall execute
and deliver, in the name of the designated transferee or transferees, one or
more new Debentures of any authorized denominations, of a like aggregate
principal amount. The foregoing notwithstanding, the Company shall have no
obligation to transfer this Amended and Restated Debenture on its books, and
shall not do so, unless it shall have received evidence satisfactory to counsel
for the Company that the transfer will not violate the Securities Act of 1933,
as amended, or any of the rules and regulations promulgated thereunder, or the
securities laws of any state.
At the option of the Registered Holder, the Debenture(s) may be exchanged
for other Debentures of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Debentures to be exchanged at the
principal office of the Company. Whenever any Debentures are so surrendered for
exchange, the Company shall execute and deliver the Debentures which the
Registered Holder is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits as the Debentures surrendered upon such
registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company, duly executed by the Registered Holder thereof or his attorney duly
authorized in writing.
No service charge will be made for any registration of transfer or exchange
of Debentures, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Debentures.
Prior to due presentment of a Debenture for registration of transfer, the
Company, and any agent of the Company may treat the Person in whose name such
Debenture is registered as the owner of such Debenture for the purpose of
receiving payment of principal of (and premium, if any) and interest on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
be overdue, and neither the Company nor any agent of the company shall be
affected by notice to the contrary.
3. Remedies.
3.1 Events of Default. "Event of Default", wherever used in this
Amended and Restated Debenture, means any one of the following events:
(a) default in the payment of any installment of interest
upon this Amended and Restated Debenture on any Payment Date, and continuance
of uch default for a period of fifteen (15) days; or
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(b) failure to pay the principal on the Debenture(s) when
due and continuance of such default for a period of fifteen (15) days; or
(c) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company (including
obligations under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles but not including any
indebtedness or obligation for which recourse is limited to property purchased)
in an aggregate principal amount in excess of Three Hundred Thousand and 00/100
Dollars ($300,000.00) or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company (including such leases but not
including such indebtedness or obligation for which recourse is limited to
property purchased) in an aggregate principal amount in excess of Three Hundred
Thousand and 00/100 Dollars ($300,000.00) by the Company, whether such indebted-
ness now exists or shall hereafter be created, which default shall have resulted
in such indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable or such obligations
being accelerated, without such acceleration having been rescinded or annulled
within a period of thirty (30) days after there shall have been given, by
registered or certified mail, to the Company by Registered Holders of at least
fifty percent (50%) of the principal amount of the Debentures a written notice
specifying such default and requiring the Company to cause such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder; or
(d) the sum of the following as of the last day of any month
shall be less than Three Million and 00/100 Dollars ($3,000,000.00):
(i) Borrower's accounts receivables and inventory, as
carried on Borrower's books and records in accordance
with Borrower's customary accounting procedures
consistently applied;
(ii) the amount of any principal due Lender repaid
subsequent to January 1, 1996; and
(iii) any cash maintained as security for Lender in a
segregated account under terms satisfactory to
Lender.
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment
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or composition of or in respect of the Company, under
Federal bankruptcy law, as now or hereafter constituted,
or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or appointing a receiver,
liquidator, trustee, or other similar official of the
Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days; or
(f) the commencement by the Company of a voluntary case under
Federal bankruptcy law, as now or hereafter constituted,
or any other applicable Federal or State bankruptcy,
insolvency, or other similar law, or the consent by it to
the institution or bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under Federal
bankruptcy law or any other applicable Federal or State
law, or the consent by it to the filing of such petition
or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company
or of any substantial part of its property, or the making
by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action; or
(g) an Event of Default, as defined in the Loan Agreement and
the Modification Agreement.
3.2 Acceleration of Maturity: Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case the
Registered Holders of not less than fifty percent (50%) of the principal
amount of the Debentures may declare the principal of all the Debentures to be
due and payable immediately, by notice in writing to the Company and upon any
such declaration such principal shall become immediately due and payable.
At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has been
obtained, the Registered Holders of a majority of the principal amount of the
Debentures, by written notice to the Company, may rescind and annul such
declaration and its consequences. No such rescission shall affect any subsequent
default or impair any right consequent thereon.
3.3 Limitation on Remedies. As a limitation on the remedies
upon default set forth herein, the Registered Holder may not take action to
enforce any remedy available to the Registered Holder for a period of thirty
(30) days after the Registered Holder has provided written notice of a
declaration of default unless such default is declared on account of bankruptcy,
in which event this provision shall not be applicable.
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3.4 Delay or Omission Not Waiver. No delay or omission of the
Registered Holder to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or any acquiescence therein. Every right and remedy given by
this Section or by law to the Registered Holder may be exercised from time to
time, and as often as may be deemed expedient.
3.5 No Recourse. No recourse shall be had for the payment of
the principal of or the interest on, this Amended and Restated Debenture, or any
part hereof, or for any claim based hereon or otherwise in respect hereof or of
the indebtedness represented hereby against any incorporator, stockholder,
officer or director, as such, past present or future, of the Company, either
directly or through the Company, whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise.
4. Covenants.
4.1 Payment of Principal, Premium and Interest. The Company will
duly and punctually pay the principal of and interest on the Debentures in
accordance with the terms of the Debentures.
4.2 Maintenance of Office or Agency. The principal office of the
Company on the Date of Issuance hereof is located at 0000 Xxxxxx Xxxxx, Xxxxxx,
Xxx Xxxxxx 00000. The Company will give prompt written notice to the Registered
Holder of any change in the location of its principal offices.
The Company may also from time to time designate one or more
other offices where the Debenture(s) may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Registered Holder of any such
designation or rescission and of any change in the location of any such office.
4.3 Company Existence. The Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (statutory and other) and franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and the
loss thereof is not disadvantageous in any material respect to the Registered
Holder.
5. Prepayment.
5.1 The Company may prepay this Amended and Restated Debenture
in whole or in part at any time.
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5.2 The Company shall prepay this Amended and Restated Debenture
in the event that either:
(i) the Company is merged into or consolidated with another
corporation, or
(ii) the Company sells all or substantially all of its
assets.
6. Miscellaneous.
6.1 Notice to the Company. For purposes of this Amended and
Restated Debenture, notice of the events contemplated herein to be given by the
Registered Holder shall be deemed given if sent in writing by certified mail,
return receipt requested, to the Company at its principal office as follows,
unless otherwise designated by the Company:
Electro-Catheter Corporation
0000 Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
6.2 Notice to Registered Holder. When this Amended and Restated
Debenture provides for notice to the Registered Holder of any event, such notice
shall be sufficiently given if in writing and mailed, first-class postage
prepaid, to the Holder, at such Holders address as it appears in the Debenture
Register (initially c/o Xxxx Xxxxx, 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 07601), not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holder is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
6.3 Governing Law. This Amended and Restated Debenture shall be
governed by and construed in accordance with the laws of the State of New
Jersey.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its seal.
ELECTRO-CATHETER CORPORATION
By: /s/Xxxxx Xxxxxxxxxx
--------------------
Xxxxx Xxxxxxxxxx,
Acting President
Attest:
/s/Xxxxxx Xxxx
--------------
Xxxxxx Xxxx, Secretary
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