Exhibit 10.8
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SECURED CREDIT AGREEMENT
AGREEMENT by and between SUMMIT BANK ("BANK") and Comtrex Systems Corporation
("BORROWER"), dated as set forth.
1. DEFINITIONS
The terms set forth below shall be defined as follows:
1.1 "Date of Agreement" is: July 5, 2000.
1.2 "Borrower" means: Comtrex Systems Corporation, a corporation.
1.3 "Borrower's Address" is: 102 Executive Drive, Suites 1,2 & 3,
Moorestown, New Jersey 08057.
1.4 "Bank's Address" is: 210 Main Street, Hackensack, New Jersey
07601.
1.5 "Collateral" means all property, assets or rights that secure
the payment of the Obligations, whether now owned or existing
or hereafter created or acquired and the cash and noncash
proceeds thereof.
1.6 "Event of Default" means each and every event specified in
Section 6 of this Agreement.
1.7 "Loan Document(s)" means any Credit Agreement, Note, Security
Agreement, Mortgage or any other document heretofore, now or
hereafter executed by Borrower to Bank, together with all
modifications, extensions and/or renewals thereof.
1.8 "Obligations" means all indebtedness, obligations and
liabilities of Borrower to Bank of every kind and description,
direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, including any
overdrafts, whether for payment or performance, now existing
or hereafter arising, whether presently contemplated or not,
regardless of how the same arise or by what instrument,
agreement or book account they may be evidenced, or whether
evidenced by any instrument, agreement or book account,
including, but not limited to all loans (including any loan by
modification, renewal or extension), all indebtedness
including any arising from any derivative transactions, all
undertakings to take or refrain from taking any action, all
indebtedness, liabilities or obligations owing from Borrower
to others which Bank may have obtained by purchase,
negotiation, discount, assignment or otherwise; and all
interest, taxes, fees, charges, expenses and attorney's fees
(whether or not such attorney is a regularly salaried employee
of Bank, any parent corporation or any subsidiary or affiliate
thereof, whether now existing or hereafter created),
chargeable to Borrower or incurred by Bank under this
Agreement, or any other document or instrument delivered in
connection herewith or therewith.
1.9 "Security Interest" means any transaction which creates or
provides for a lien or security interest by agreement.
1.10 "Termination Date" is September 30, 2001, unless such date is
extended on one or more occasions by the Bank in its sole
discretion then the last date of the last such extension.
To the extent not defined in Section 1 (or any other Loan Document),
unless the context otherwise requires, all other terms contained in
this Agreement shall have the meanings attributed to them by the
Uniform Commercial Code in force in the State of New Jersey, as of the
Date of Agreement, to the extent that same are used or defined therein.
To the extent not defined in Section 1 (or any other Loan Document),
unless the context otherwise requires, all accounting terms in this
Agreement shall be construed in accordance with Generally Accepted
Accounting Principles as of the Date of Agreement, to the extent that
same are used or defined therein.
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2. COMMITMENTS
Subject to the terms and conditions of the Loan Documents, Bank agrees
to lend to Borrower and Borrower agrees to borrow from Bank an
aggregate principal amount at any one time outstanding not to exceed
$2,000,000.00 from the Date of Agreement to the Termination Date.
Within such limits the Borrower may borrow, repay and re-borrow at any
time or from time to time. The face amount of all commercial or standby
letters of credit issued by Bank and drafts accepted by Bank for the
account of Borrower is included in the aggregate principal amount.
Commercial and standby letters of credit shall be issued by Bank upon
receipt of Bank's standard documentation with respect thereto and
subject to Bank's standard fees. The proceeds of all of the borrowing
hereunder shall be used solely for working capital.
3. REPRESENTATIONS AND WARRANTIES
3.1 Borrower represents and warrants to Bank, and such
representations and warranties shall be continuing so long as
any Obligations shall remain outstanding, as follows:
3.1.1 Borrower has the power and authority to own the Collateral, to
enter into and perform the Loan Documents and to incur the
Obligations. Borrower has been duly incorporated and organized
and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and is
duly qualified as a foreign corporation in those jurisdictions
where the conduct of its business or the ownership of its
properties requires qualification.
3.1.2 Borrower has not changed its name, form, or structure, been
the surviving entity in a merger or acquired any business; or
changed the location of the Equipment, any of the Inventory,
its place of business or chief executive office, its records
with respect to Receivables or the location of any returns of
Inventory.
3.1.3 This Agreement and any other Loan Documents constitute valid
and legally binding Obligations of Borrower and are
enforceable against Borrower in accordance with their
respective terms.
3.1.4 Borrower has filed all Federal, state and local tax returns
and other reports it is required to file and has paid or made
adequate provision for payment of all such taxes, assessments
and other governmental charges.
3.1.5 All property owned or utilized by Borrower is in compliance
and will continue to be in compliance with all requirements of
all applicable environmental laws, including, without
limitation, the Industrial Site Recovery Act f/k/a the
Environmental Cleanup Responsibility Act (N.J.S.A. 13:1K-6 et
seq., as amended) and the Spill Compensation and Control Act
(N.J.S.A. 58:10-23.11 as amended) and a certain statute
adopted by New Jersey for registration of underground storage
tanks (N.J.S.A. 58:10A-21 et seq.); the Hazardous and Solid
Waste Amendments of 1984 Pub. L98-616 (42 U.S.C. 699 et seq.,
as amended); the Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq., as amended) and the Comprehensive
Environmental Response, Compensation and Liability Act (42
U.S.C. 9601 et seq., as amended); (all such Federal, state,
county, municipal or other laws, ordinances or regulations are
hereinafter collectively referred to as the "Environmental
Laws").
3.1.6 Borrower has good and marketable title to all of its
properties and assets. The execution and performance of this
Agreement and any Loan Document will not violate or result in
a default or in the creation or imposition of any lien or
encumbrance upon any of the assets of Borrower (immediately,
with the passage of time or with the giving of notice and the
passage of time) under any other contract, agreement or
instrument to which Borrower is a party or by which Borrower
is bound, nor will it result in the acceleration of any
obligation under any mortgage, lien, lease, franchise,
license, permit, agreement, instrument, order, arbitration
award, judgment, or decree, or in the termination of any
license, franchise, lease, or permit to which Borrower is a
party or by which it is bound; and it will not violate or
conflict with any other restriction of any kind or character
to which Borrower is subject.
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3.1.7 Borrower incurs the Obligations herein from Bank for business
purposes only and shall not incur the Obligations for
personal, household or family purposes.
3.1.8 There is no claim, loss, contingency, litigation, or
proceeding whether or not pending, threatened or imminent
against or otherwise affecting Borrower that involves the
possibility of any judgment or liability not fully covered by
insurance or that may result in a material adverse change in
the business, properties, prospects, operation or condition
(financial or otherwise) of Borrower.
3.1.9 Borrower has complied with all applicable statutes,
regulations, ordinances, court decrees or other directives of
the United States of America, and all states, counties,
municipalities and agencies with respect to the manufacture
and sale of its goods, the rendition of its services and/or
the conduct of its business.
3.1.10 Borrower has heretofore delivered to Bank current financial
statements, acceptable to Bank, which were prepared by
independent certified public accountants. The financial
statements were true, correct and complete and were prepared
in accordance with Generally Accepted Accounting Principles,
consistently applied and present fairly the financial position
and results of operations of Borrower as of the date of and
for the period involved. The financial statements make full
and adequate provision for all obligations, liabilities, and
commitments (fixed and contingent) of Borrower as of the date
of the financial statements. Since the date of the financial
statements, there has been no material adverse change in the
business, properties, prospects, operation or condition
(financial or otherwise) of Borrower.
3.1.11 With respect to each Employee Benefit Plan maintained by
Borrower, no Prohibited Transaction or Reportable Event (as
defined in Title IV of the Employee Retirement Income Security
Act of 1974, as amended) has occurred and is continuing;
Borrower is not subject to thirty (30) days notice to the
Pension Benefit Guaranty Corporation, and Borrower will comply
with the provisions of the Employee Retirement Income Security
Act of 1974, as amended and the Internal Revenue Code of 1986,
as amended.
3.1.12 Borrower is the owner of the Collateral free and clear of all
Security Interests, encumbrances or liens, except liens which
arise by operation of law with respect to Obligations of
Borrower which are not yet due and payable; and Borrower will
defend the Collateral against all claims and demands of all
persons or entities at any time claiming an interest therein.
3.1.13 Borrower is in compliance with all requirements of the
Americans With Disabilities Act of 1990, 42 U.S.C. 12101 et
seq., including but not limited to those regulations
promulgated by the Architectural and Transportation Barrier
Compliance Board at 36 CFR 1191 et seq., and by the Department
of Justice at 28 CFR 36 et seq.
3.1.14 Borrower is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986 as
amended and the related Treasury Department regulations,
including temporary regulations.
4. GENERAL COVENANTS
4.1 Borrower covenants and agrees that so long as any Obligations
shall remain outstanding:
4.1.1 Borrower shall not permit any further mortgage, pledge, grant,
Security Interest in or lien or encumbrance upon any of the
property, assets or rights of Borrower, except in favor of
Bank and security interests securing purchase money
indebtedness permitted under Section 5.1.3 hereof.
4.1.2 Borrower shall not merge or consolidate with or sell, assign,
lease or otherwise transfer or dispose of (whether in one
transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or
hereafter acquired or arising) to, any person or entity or
acquire all or substantially all the assets or the business of
any person or entity;
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4.1.3 Borrower shall continue to engage in an efficient and
economical manner in a business of the same general type as
conducted by it on the Date of Agreement.
4.1.4 Borrower shall furnish to Bank:
4.1.4.1 Within ninety (90) days after the last day of each
fiscal year of Borrower, a financial statement
including a balance sheet and statements of income,
retained earnings and changes in financial
position, each prepared in accordance with
Generally Accepted Accounting Principles
consistently applied, and audited by an independent
certified public accountant satisfactory to Bank
and a certificate in form and substance acceptable
to Bank demonstrating compliance with the financial
covenants set forth in Section 5 hereof;
4.1.4.2 Within sixty (60) days after the close of each quarter
of each fiscal year of Borrower, financial
statements similar to those required under
paragraph 4.1.4.1, prepared by Borrower and
certified by the chief financial officer of
Borrower;
4.1.4.3 Together with the financial statements set forth in
Section 4.1.4.1, a letter executed by the aforesaid
accountant acknowledging Bank's reliance on said
financial statements and Borrower's knowledge of
such reliance;
4.1.4.4 [Intentionally omitted]
4.1.4.5 Intentionally omitted]
4.1.4.6 Promptly and in form satisfactory to Bank, such other
information as Bank may reasonably request from
time to time.
4.1.5 Borrower shall comply with all present and future laws, rules
and regulations applicable to Borrower in the operation of its
business and the ownership of its assets, and all material
agreements to which it is subject.
4.2 Borrower further covenants and agrees to:
4.2.1 Promptly notify Bank of any condition or event which
constitutes, or would constitute with the passage of time or
giving of notice or both, an Event of Default under this
Agreement or any Loan Document and promptly inform Bank of any
events or change in the financial condition of Borrower
occurring since the date of the last financial statement of
Borrower delivered to Bank, which individually or cumulatively
when viewed in light of prior financial statements, could
result in a material adverse change in the business,
properties, prospects, operation or condition (financial or
otherwise) of Borrower;
4.2.2 Maintain in good standing its corporate existence in its
jurisdiction of incorporation and its status as a foreign
corporation qualified to do business in those jurisdictions
where Borrower is required to be qualified.
4.2.3 Pay or deposit promptly when due all sales, use, excise,
personal property, income, withholding, corporate, franchise
and other taxes, assessments and governmental charges and,
when requested by Bank, submit to Bank proof satisfactory to
Bank that such payments and/or deposits have been made;
4.2.4 Maintain casualty insurance coverage with an insurance company
on the Collateral in such amounts and of such types as may be
requested by Bank, and in any event, as are ordinarily carried
by similar businesses; and, in the case of all policies
insuring property in which Bank shall have a Security Interest
of any kind whatsoever all such insurance policies shall
contain standard lender's loss payable clauses in favor of
Bank and provide that the proceeds thereof shall be payable to
Bank, as its interest may appear. Borrower shall produce proof
of payment of premiums for said insurance policies as Bank may
reasonably request. All said policies or certificates thereof,
including all endorsements thereof and those required
hereunder, shall be deposited with Bank; and such policies
shall contain provisions that no such insurance may be
canceled or decreased or amended in such manner and to such
extent as prudent business judgment would dictate. If Borrower
shall at any time or times hereafter fail to obtain and/or
maintain any of the policies of insurance required herein, or
fail to pay any premium in whole or in part relating to any
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such policies, Bank shall be notified within thirty (30) days
of any such failure to obtain and/or maintain said policies of
insurance or the failure to pay any premium when due. The Bank
may, but shall not be obliged to, obtain and/or cause to be
maintained insurance coverage with respect to the Collateral,
including, at Bank's option, the coverage provided by all or
any of the policies of Borrower and pay all or any part of the
premium therefor, without waiving any Event of Default by
Borrower, and any sums, including reasonable attorney fees,
court costs, expenses and other charges related thereto, so
disbursed by Bank shall be payable, on demand, by Borrower to
Bank and shall be an additional Obligation;
4.2.5 Notify Bank in writing within ten (10) days, of any claim,
litigation, action or proceeding filed or commenced by or
against Borrower that could result in a material adverse
change in the business, properties, prospects, operation or
condition (financial or otherwise) of Borrower; or a material
adverse occurrence, in each case, together with a complete
description of the action taken or proposed to be taken with
respect thereto;
4.2.6 Permit Bank, at Borrower's expense, through Bank's authorized
attorneys, accountants or representatives, to inspect the
Collateral and inspect, examine and audit the books, accounts,
records, ledgers and assets of every kind and description of
Borrower with respect thereto at reasonable times;
4.2.7 At any time and from time to time upon request of Bank,
execute and deliver to Bank, in form and substance
satisfactory to Bank, such documents as Bank shall deem
necessary or desirable to perfect or maintain perfected the
Security Interest of Bank in the Collateral or which may be
necessary to comply with the provisions of the law of the
State of New Jersey or the law of any other jurisdiction in
which Borrower may then be conducting business or in which any
of the Collateral may be located; and
4.2.8 Notify Bank in writing immediately of any amendments or other
changes to any by-laws, articles of incorporation, or any
other document (or other arrangement, whether or not in
writing) governing the organization or operation of Borrower
or the respective interests of its shareholders.
5. FINANCIAL COVENANTS
5.1 Borrower covenants and agrees that so long as any Obligations
shall remain outstanding Borrower shall:
5.1.1 Maintain a Current Ratio of greater than 1.50:1 as of the end
of each fiscal quarter;
5.1.2 Maintain a Tangible Net Worth of greater than $2,000,000.00 as
of March 31, 2000. Thereafter, minimum Tangible Net Worth to
increase by 50% of annual net income as of each fiscal year
end;
5.1.3 Not incur any indebtedness from any source other than Bank,
except normal trade debts and accruals in the ordinary course
of business, and capital expenditures of up to $100,000.00;;
5.1.4 Maintain a ratio of Total Liabilities to Tangible Capital
Funds of less than 1.75:1 as of the end of each fiscal
quarter; and
5.1.5 Not permit its Debt Service Coverage Ratio to be less than
1.25:1. "Debt Service Coverage Ratio" shall mean earnings
before interest, taxes, depreciation and amortization less
capital expenditures (including capital leases) divided by the
sum of scheduled principal and interest payments (including
periodic payments to Bank hereunder) plus taxes plus current
portion of long term debt. All calculations of Debt Service
Coverage Ratio shall be on a rolling trailing four quarter
basis at the end of each fiscal quarter.
6. EVENTS OF DEFAULT AND ACCELERATION
6.1 The occurrence of any one or more of the following events
shall constitute an Event of Default hereunder:
6.1.1 Failure to pay any principal, interest or any of the
Obligations as and when due;
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6.1.2 Failure to perform or observe any covenant, term or agreement
herein set forth or set forth in any Loan Document;
6.1.3 Any representation or warranty made or deemed made by the
Borrower herein or in any Loan Document or which is contained
in any certificate, document, opinion or other statement
furnished now or at any time shall prove to be incorrect in
any material respect on or as of the date made or deemed to be
made;
6.1.4 Failure to pay or perform any Obligation of any Borrower to
Bank, whether by maturity or acceleration, set forth herein or
in any Loan Document;
6.1.5 [Intentionally omitted]
6.1.6 A proceeding being filed or commenced against Borrower for
dissolution or liquidation; or any Borrower voluntarily or
involuntarily terminating or dissolving or being terminated or
dissolved; insolvency of Borrower, or Borrower fails to pay
its debts as they become due in the ordinary course of
business; or a creditor's committee is appointed for the
business of Borrower, or Borrower makes an assignment for the
benefit of creditors, or a petition in bankruptcy or for
reorganization or to effect a plan of arrangement with
creditors is filed by Borrower; or Borrower applies for or
permits the appointment of a receiver or trustee for any or
all of its property, assets or rights, or any such receiver or
trustee shall have been appointed for any or all of its
property, assets or rights; or any of the above actions or
proceedings whatsoever are commenced by or against any other
party liable for the Obligations;
6.1.7 Any attachments, liens or additional Security Interests being
placed upon any of the Collateral;
6.1.8 Acquisition at any time or from time to time of title to the
whole or any part of the Collateral by any person, partnership
or corporation other than Borrower;
6.1.9 Any final judgment, order or decree rendered against Borrower
exceeding $25,000 and remaining undischarged, unstayed or
outstanding against Borrower for a period of thirty (30) days;
6.1.10 Any investigation undertaken by any governmental entity or if
any indictment, charge or proceeding is filed or commenced,
whether criminal or civil, pursuant to Federal or state law
against Borrower for which forfeiture of any of the property
or assets of Borrower is a penalty;
6.1.11 Any Reportable Event occurs or if any Employee Benefit Plan is
terminated or Bank reasonably believes that such plan may be
terminated pursuant to and as defined in the Employee
Retirement Income Security Act of 1974, as amended;
6.1.12 [Intentionally omitted]
6.1.13 [Intentionally omitted]
6.2 If any Event of Default shall occur under Sections 6.1.1,
6.1.2, 6.1.4, or 6.1.7 and shall continue for ten (10) days
after Borrower is notified of the occurrence of such event or
if any Event of Default shall occur under section 6.1.3,
6.1.5, 6.1.6, or 6.1.8 thru 6.1.11, then or at any time
thereafter, while such Event of Default shall continue, Bank
may declare all Obligations to be due and payable, without
notice, protest, presentment, dishonor or demand, all of which
are hereby expressly waived by Borrower.
7. RIGHTS AND REMEDIES
Bank shall have the following rights and remedies:
7.1 Upon an Event of Default, Bank, and any officer or agent of
Bank is hereby constituted and appointed as true and lawful
attorney-in-fact of Borrower with power:
7.1.1 To endorse the name of Borrower upon any instrument of payment
(including payments made under any policy of insurance) that
may come into possession of Bank in full or part payment of
any Obligation;
7.1.2 To sign and endorse the name of Borrower upon any invoice,
freight or express bill, bill of lading, storage or warehouse
receipt, drafts against account debtors or other obligors;
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7.1.3 To notify the post office authorities to change the address
for delivery of mail of Borrower to an address designated by
Bank and to receive, open and dispose of all mail addressed to
Borrower;
7.1.4 To sign the name of Borrower upon any Local, State or Federal
agency information release form including but not limited to
Tax Information Authorization Form 8821 of the Internal
Revenue Service;
7.1.5 To sell, assign, sue for, collect or compromise payment of all
or any part of the Collateral in the name of Borrower, or in
its own name, or make any other disposition of Collateral, or
any part thereof, which disposition may be for cash, credit or
any combination thereof, and Bank may purchase all or any part
of the Collateral at public or, if permitted by law, private
sale, and in lieu of actual payment of such purchase price,
may set-off the amount of such price against the Obligations;
7.1.6 To do any and all things necessary to exercise its rights and
remedies as fully and effectually as Borrower might or could
do but for this appointment, together with full power of
substitution (Borrower hereby ratifying all that said
attorney-in-fact shall lawfully do or cause to be done by
virtue hereof). Neither Bank nor its agents shall be liable
for any acts or omissions or for any error of judgment or
mistake of fact or law in its capacity as such
attorney-in-fact. This power of attorney is coupled with an
interest and shall be irrevocable so long as any Obligations
shall remain outstanding.
7.1.7 [Intentionally omitted]
7.2 As to any amount past due, Bank shall have the right to
setoff, without notice to Borrower, any and all deposits or
other sums at any time or times credited by or due from Bank
to Borrower, whether in a special account or other account or
represented by a certificate of deposit (whether or not
matured) which deposits and other sums shall at all times
constitute additional security for the Obligations and may be
set-off against all or any part of the Obligations at any
time. Borrower does hereby authorize Bank and any other member
of Summit Bancorp on behalf of Bank to likewise setoff without
notice, any or all deposits or other sums on behalf of Bank,
hereby granting to all such members of Summit Bancorp as
necessary to effectuate the foregoing, a lien on and a
security interest in and to such deposits or other sums.
7.3 Bank shall have, in addition to any other rights and remedies
contained herein, and in any Loan Document, all of the rights
and remedies of a secured party under the Uniform Commercial
Code in force in the State of New Jersey, as of the Date of
Agreement, and all rights and remedies available at law or in
equity, all of which rights and remedies shall be cumulative
and non-exclusive, to the extent permitted by law.
7.4 Any notice required to be given by Bank of a sale or other
disposition of the Collateral or other intended action by Bank
made in accordance with the terms herein or any Loan Document
at least ten (10) days prior to such proposed action, shall
constitute fair and reasonable notice to Borrower of any such
action.
7.5 If at any time Bank determines that any applicable law,
regulation, condition or directive, or the interpretation of
any thereof, relating to capital adequacy (including but not
limited to, any request, guideline or policy, whether or not
having the force of law and including but not limited to, any
regulation promulgated by the Board of Governors of the
Federal Reserve System as now or from time to time hereafter
in effect) by any authority charged with the administration or
interpretation thereof, or any change in any of the foregoing,
has or would have the effect of reducing the rate of return on
Bank's capital as a consequence of Bank's obligations under
this Agreement to a level below that which Bank would have
achieved but for such law, regulation, condition, directive,
interpretation or change (taking into consideration Bank's
policies with respect to capital adequacy) by an amount deemed
by Bank to be material, then from time to time Borrower shall
pay to Bank on demand such additional amount(s) as will
compensate Bank for such reduction.
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7.5.1 Bank will promptly notify Borrower of any event of which it
has knowledge, occurring after the date hereof, which will
entitle Bank to compensation pursuant to Section 7.5. A
certificate or notice from Bank claiming compensation under
Section 7.5 and setting forth the additional amount(s) to be
paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, Bank may use any
reasonable averaging and attribution methods.
7.5.2 Borrower's failure to pay such additional amount(s), shall
result in Borrower becoming liable for the difference between
the actual return achieved and what Bank had expected to
achieve and shall become a part of Borrower's Obligations
herein secured by the Collateral.
7.6 In the event that Borrower's credit relationship with Bank is
rated substandard or lower on Bank's rating system(s), all of
which ratings shall be in Bank's absolute and sole discretion,
Borrower shall pay to Bank, upon receipt of notice from Bank
to such effect, an additional 1% per annum in excess of each
payment to be made under this Agreement and any other Loan
Document until such rating is upgraded to above substandard.
Borrower's failure to pay such additional amount(s) shall
become a part of Borrower's Obligations payable on demand and
secured by the Collateral.
8. GENERAL PROVISIONS
8.1 The failure of Bank at any time or times hereafter to require
strict performance by Borrower of any of the provisions,
warranties, terms and conditions contained herein or in any
Loan Document shall not waive, affect or diminish any right of
Bank at any time or times thereafter to demand strict
performance thereof. No rights of Bank hereunder or in any
Loan Document shall be deemed to have been waived by any act
or knowledge of Bank, its agents, officers or employees,
unless such waiver is contained in an instrument in writing
signed by an officer of Bank and directed to Borrower
specifying such waiver. No waiver by Bank of any of its rights
shall operate as a waiver of any other of its rights or any of
its rights on a future occasion.
8.2 Any demand or notice required or permitted to be given
hereunder or in any Loan Document shall be deemed effective
when deposited in the United States mail, and sent by
certified mail, return receipt requested, postage prepaid,
addressed to Bank, ATTN: Branch Manager, at Bank's Address or
to Borrower at Borrower's Address, as applicable, or to such
other address as may be provided by the party to be notified,
on ten (10) days prior written notice to the other party.
8.3 Any notice required to be given by Bank made in accordance
with the terms herein or any Loan Document at least ten (10)
days prior to such proposed action, shall constitute fair and
reasonable notice to Borrower of any such action.
8.4 This Agreement and the Loan Documents contain the entire
understanding between the parties hereto with respect to the
transactions contemplated herein and such understanding shall
not be modified except in writing signed by or on behalf of
the parties hereto.
8.5 Borrower shall not hold Bank liable due to any action or
failure to act by Bank herein or in any Loan Document except
for any action or failure to act as a result of Bank's gross
negligence or willful misconduct. This provision shall survive
the termination or expiration of this Agreement or any Loan
Document and the repayment in full of Borrower's Obligations.
8.6 Wherever possible, each provision herein or in any Loan
Document shall be interpreted in such manner as to be
effective and valid under applicable law. Should any portion
of this Agreement or any Loan Document be declared invalid for
any reason in any jurisdiction, such declaration shall have no
effect upon the remaining portions of this Agreement or any
Loan Document. Furthermore, the entirety of this Agreement or
any Loan Document shall continue in full force and effect in
all other jurisdictions and said remaining portions herein or
in any Loan Document shall continue in full force and effect
in the subject jurisdiction as if this Agreement or any Loan
Document had been executed with the invalid portions thereof
deleted.
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8.7 In the event Bank seeks to take possession of any or all of
the Collateral by court process, Borrower hereby irrevocably
waives any bonds and any surety or security relating thereto
required by any statute, court rule or otherwise as an
incident to such possession, and waives any demand for
possession prior to the commencement of any suit or action to
recover.
8.8 The provisions of this Agreement or any Loan Document shall be
binding upon and shall inure to the benefit of the heirs,
personal representatives, administrators, successors and
assigns of Bank and Borrower; provided, however, Borrower may
not assign any of its rights or delegate any of its
Obligations hereunder or in any Loan Document without the
prior written consent of Bank.
8.9 This Agreement or any Loan Document is and shall be deemed to
be a contract entered into and made pursuant to the laws of
the State of New Jersey and shall in all respects be governed,
construed, applied and enforced in accordance with the laws of
said State.
8.10 If, prior hereto and/or at any time or times hereafter, Bank
shall employ counsel in connection with the execution and
consummation of the transactions contemplated herein or in any
Loan Document or to commence, defend or intervene, file a
petition, complaint, answer, motion or other pleadings, or to
take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to this
Agreement or any Loan Document, or to enforce any rights of
Bank hereunder or in any Loan Document, whether before or
after the occurrence of any Event of Default, or to collect
any of the Obligations then, in any of such events, Borrower
agrees to pay attorney fees, (whether or not such attorney is
a regularly salaried employee of Bank, any parent corporation
or any subsidiary or affiliate thereof, whether now existing
or hereafter created), not to exceed 20% of the Obligations,
which shall be deemed reasonable and any expenses, costs and
charges relating thereto, and such shall be part of the
Obligations payable on demand and secured by the Collateral.
8.11 With respect to all or any part of the Obligations, in the
event that Bank seeks to enter into a participation,
intercreditor and/or assignment agreement, then Borrower
hereby authorizes Bank to release all or part of any financial
or credit information provided by Borrower to Bank to any
other bank or financial institution without notice.
8.12 Each reference herein or in any Loan Document to Bank shall be
deemed to include its successors and assigns, and each
reference to Borrower and any pronouns referring thereto as
used herein shall be construed in the masculine, feminine,
neuter, singular or plural as the context may require, and
shall be deemed to include the heirs, personal
representatives, administrators, successors and assigns of
Borrower, all of whom shall be bound by the provisions hereof
or in any Loan Document. The term "Borrower" as used herein
shall, if this Agreement or any Loan Document is signed by
more than one Borrower, mean, unless this Agreement or any
Loan Document otherwise provides or unless the context
otherwise requires, the "Borrower" and each of them and each
and every representation, promise, agreement and undertaking
shall be joint and several, except that the granting of the
Security Interest, right of set-off and lien shall be by each
Borrower in and to its several respective properties.
8.13 The section headings herein are included for convenience only
and shall not be deemed to be a part of this Agreement or any
Loan Document.
9. ASSIGNMENT BY BANK
Bank may from time to time without notice to Borrower, sell, assign,
transfer or otherwise dispose of all or any part of the Obligations
and/or the Collateral therefor. In such event, each and every immediate
and successive purchaser, assignee, transferee or holder of all or any
part of the Obligations and/or the Collateral therefor shall have the
right to enforce this Agreement, by legal action or otherwise, for its
own benefit as fully as if such purchaser, assignee, transferee or
holder were herein by name specifically given such rights. Bank shall
have an unimpaired right to enforce this Agreement for its benefit to
that portion of the Obligations as Bank has not sold, assigned,
transferred or otherwise disposed of.
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10. WAIVER OF JURY TRIAL
BORROWER WAIVES TRIAL BY JURY AND CONSENTS TO AND CONFERS PERSONAL
JURISDICTION ON COURTS OF THE STATE OF NEW JERSEY OR OF THE FEDERAL
GOVERNMENT, AND EXPRESSLY WAIVES ANY OBJECTIONS AS TO VENUE IN ANY OF
SUCH COURTS, AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON BORROWER
BY MAILING A COPY OF THE SUMMONS TO BORROWER AT BORROWER'S ADDRESS.
BANK LIKEWISE WAIVES TRIAL BY JURY.
==============================================================================
WITNESS: BORROWER Comtrex Systems Corporation
/s/ /s/
- -------------------------------------- ------------------------------------
Name: Kenneth J. Gertie Jeff Rice, President
ATTEST: SUMMIT BANK
/s/
- -------------------------------------- ------------------------------------
Dennis Wasilewski, Vice President
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