EXHIBIT
3.1
CERTIFICATE OF INCORPORATION
OF
D & S PRODUCT DEVELOPMENT AND MARKETING SERVICES, INC.
|
FILED
NOV 13 2:08 PM ‘73
SECRETARY OF STATE
MIAMI, FLORIDA
|
WE, the undersigned hereby associate ourselves together for the purpose of becoming a corporation under the laws of the State of Florida providing for the formation of a corporation for profit, with the powers, rights, privileges and immunities hereinafter mentioned, and we hereby make, subscribe and acknowledge and file with the Secretary of the State of Florida, this Certificate of Incorporation; and to that end we do, by this Certificate, set forth:
ARTICLE I.
The name of this corporation shall be:
D & S PRODUCT DEVELOPMENT AND MARKETING SERVICES, INC.
ARTICLE II
The general nature of the business and the objects and purposes to be transacted and carried on are to do any and all things allowed and permitted to be done by corporations under the Statutes of the State of Florida, and to do any and all of the things hereinafter mentioned as fully and to the same extent as natural persons might or could do, to wit:
a) To develop, produce, market and sell any and all products at wholesale or retail and to provide marketing services to corporations, partnerships and individuals.
b) To build, erect, construct, purchase, hire or otherwise acquire, own, provide, establish, maintain, hold, work, develop, sell, convey, lease, mortgage, exchange, improve and otherwise dispose of real estate and real property and all other kinds of property of whatsoever nature, whether real, personal or mixed, or any interests or rights therein without limits as to amounts; to buy, sell, assign, convey and cancel liens upon personal property and real estate of every kind and nature whatsoever; to act as broker or agent for the purchase, sale, leasing and management
of real estate, and the negotiation of loans thereon; to borrow and lend money and to
negotiate loans; to draw, endorse, accept, discount and deliver bills of exchange, promissory notes, bonds debentures, and other negotiable instruments of whatsoever nature, and secure the same by mortgage on its property or otherwise; to issue on commission, subscribe for, take, acquire, hold, exchange and deal in shares, stocks, bonds, obligations or securities of any government or authority, individual or corporation.
c) To carry on the business of a holding company and to purchase and acquire any mercantile or commercial business, trade or enterprise permitted by the laws of the State of Florida, and to own, hold, operate, maintain, use, sell or otherwise dispose of same. To enter into or engage in any such business, trade or enterprise.
d) To make and carry out contracts for building, erecting, improving, and repairing buildings, structures, improvements, warehouses, docks, bridges, bulkheads, sea walls, fills and structures of every kind and nature whatsoever; to build, construct or repair roads, bridges, wharves, sea walls, sidewalks, ditches, drains, bulkheads and in connection therewith, to use any appliance or appliances, dredge or equipment of whatsoever nature for the purpose of so doing; to carry on in any and all of its respective branches and the business of general contracting of whatsoever nature; to own and operate boats, boat lines, bridges, and dredges; to make deepen or widen channels or canals; to fill in low ground; to buy, sell, manufacture, trade and deal in machinery, tools, and in steel, iron, plaster, granite, implements, stone, brick, lumber, shell, sand and every kind of building material and supplied whatsoever; to make all manner of river and harbor improvements; to engage in the building of buildings and repairing of vessels, ships, boats, crafts and to do all manner of marine construction work.
e) To engage in the sales and commission business in the representation of factories, wholesalers and businesses which require the use and services of a sales and commissions agency, and to do all things necessary in connection with the operation of a sales and commission agency; as well as to engage in other similar and allied businesses incident to a sales and commission agency, which said agency will operate both within and without the continental limits of the United States of America.
f) To own, conduct, operate and maintain a store or stores or distribution centers, warehouses, lofts, lots, storage centers, or other outlets for the purpose of manufacturing, making, buying, selling and otherwise dealing in building supplied and equipment incidental to the construction business.
g) Generally, to make and perform contracts of any kind and description, and for the purpose of attaining any of the objects of the corporation, to do and perform any other act or things, and to exercise any and all powers which a co-partnership or natural person could do and exercise, and which are now, or hereafter may be authorized by law, and generally to do and perform any and all things necessary or incidental to the performing or carrying out of the powers hereinabove specifically delegated or implied.
ARTICLE III.
The stock of this corporation shall be divided into
500
shares of stock,
ONE ($1.00) DOLLAR par value.
All said stock shall be payable in cash, property, labor or services at a just valuation to be fixed by the Board of Directors at a meeting called for that purpose; property, labor or services may be purchased or paid for with the capital stock, at a just valuation to be fixed by the Board of Directors at a meeting called for that purpose.
ARTICLE IV.
The amount of capital with which this corporation shall begin business shall be no less than FIVE HUNDRED ($500.00) Dollars.
ARTICLE V.
The principal place of business of said corporation shall be at
1190 N. E. 125 St., N. Miami, Florida 33161
with the privilege of having branch offices within and without the State of Florida.
ARTICLE VI.
This corporation shall have perpetual existence.
ARTICLE VII
The names and post office addresses of the first Board of Directors of the corporation, who shall hold office for the first year, or until successors are chosen, shall be:
NEIL STEVEN ROLLNICK, Pres.
|
Director
|
LISA KUHN, V. Pres.
|
Director
|
HOWARD J. FEINBERG, Sec.-Treas.
|
Director
|
ARTICLE VIII.
The number of directors of this corporation shall be not less than three (3) nor more than nine (9).
ARTICLE IX.
The names and post office addresses of the President, Vice-President, and Secretary-Treasurer, who shall hold office until their successors are elected or appointed or have qualified, are:
NEIL STEVEN ROLLNICK
|
1175 N. E. 125
th
Street
|
President
|
|
North Miami, Florida
|
|
LISA KUHN
|
1175 N. E. 125
th
Street
|
Vice-President
|
|
North Miami, Florida
|
|
HOWARD J. FEINBERG
|
1175 N. E. 125
th
Street
|
Secretary-
|
|
North Miami, Florida
|
Treasurer
|
ARTICLE X.
The names and post office addresses of each subscriber and the number of shares of stock
which each agree to take are:
NEIL STEVEN ROLLNICK
|
1175 N. E. 125
th
Street
|
250
Shares
|
|
North Miami, Florida
|
$
|
LISA KUHN
|
1175 N. E. 125
th
Street
|
125
Shares
|
|
North Miami, Florida
|
$
|
HOWARD J. FEINBERG
|
1175 N. E. 125
th
Street
|
125 Shares
|
|
North Miami, Florida
|
$
|
All of the proceeds of which will amount to at least $500.00.
ARTICLE XI.
The Resident Agent and street address of the office, place of business or location for the service of process within this State is as follows:
COHEN, ANGEL, FEINBERG & ROLLNICK
|
1175 Northeast 125
th
Street
|
North Miami, Florida 33161
|
IN WITNESS WHEREOF, we have hereunto set our hands and seals and acknowledged to be filed in the office of the Secretary of State, the foregoing Certificate of Incorporation, this
6
th
DAY OF
November
, 1973.
|
Signed Neil Steven Rollnick
|
(SEAL)
|
|
|
NEIL STEVEN ROLLNICK, Pres.
|
|
|
|
Signed Lisa Kuhn
|
(SEAL)
|
|
|
LISA KUHN, V.Pres.
|
|
|
|
Signed Howard Feinberg
|
(SEAL)
|
|
|
HOWARD J. FEINBERG, Sec.-Treas.
|
STATE OF FLORIDA )
|
) SS
|
COUNTY OF DADE )
|
|
BEFORE ME, the undersigned authority, duly authorized to administer oaths and take acknowledgements, personally appeared
NEIL STEVEN ROLLNICK, LISA KUHN, and
HOWARD J. FEINBERG
And each severally acknowledged before me that they signed the foregoing Certificate of Incorporation for the purposes therein expressed.
WITNESS by hand and official at
North Miami
said County and State, this
6
th
day of
November
, 197
3.
|
Signed Tania Lyter
|
|
Notary Public, State of Florida
|
|
My Commission expires:
|
|
NOTARY PUBLIC, STAE of FLORIDA at LARGE
|
|
MY COMMISSION EXPIRES MAR. 4, 1977.
|
|
FILED
NOV 13 2:08 PM ‘73
SECRETARY OF STATE
MIAMI, FLORIDA
|
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR
DOMICILE FOR THE SERVICE OF PROCESS WITHIN THIS
STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED
In pursuance of Chapter 48.091, Florida Statutes, the following is submitted, in compliance with said Act:
First - That
D & S PRODUCT DEVELOPMENT AND MARKETING SERVICES, INC.
desiring to organize under the laws of the State of Florida, with its principal office, as indicated in the Articles of Incorporation at City of North Miami, County of Dade, State of Florida, has named
NEIL STEVEN ROLLNICK
, c/o Cohen, Angel, Feinberg & Rollnick, 1175 Northeast 125
th
Street, North Miami, Florida, as its Agent to accept service of process within this State.
Having been named to accept service of process for the above stated corporation, at place designated in this Certificate, I hereby accept to act in this capacity, and agree to comply with the provision of said Act relative to keeping open said office.
|
|
|
By:
|
Signed Neil Steven Rollnick
|
|
|
NEIL STEVEN ROLLNICK
|
|
|
Resident Agent
|
|
|
|
|
FILED
NOV 13 2:08 PM ‘73
SECRETARY OF STATE
MIAMI, FLORIDA
|
|
FILED
NOV 13 2:34 AM ‘80
SECRETARY OF STATE
MIAMI, FLORIDA
|
CERTIFICATE OF INCORPORATION
OF
STAR BRITE CORPORATION FORMERLY KNOWN AS
D & S DEVELOPMENT AND MARKETING SERVICES, INC.
ARTICLE I.
The name of this corporation shall be:
STAR BRITE CORPORATION
(.)
ARTICLE III.
The stock of this corporation shall be divided into 5,000,000 (
)
shares of stock, ONE CENT ($.01) par value (
)
.
All said stock shall be payable in cash, property, labor or services at a just valuation to be fixed by the Board of Directors at a meeting called for that purpose; property, labor or services may be purchased or paid for with the capital
ARTICLE V.
The principal place of business of said corporation shall be at 2699 South Bayshore Drive, Miami, Florida 33133 () with the privilege of having branch offices within and without the State of Florida.
ARTICLE XI.
The Resident Agent and street address of the office, place of business or location for the service of process within this State is as follows:
NEIL ROLLNICK
2699 South Bayshore Drive
Miami, FL 33133
ARTICLE XII
INDEMNIFICATION
(a) The Corporation shall indemnify any person made a party to an action by or in the right of the Corporation to procure a judgment in its favor by reason of their being or having been director, officer or employer of the Corporation, or any other corporation
which they served as such at the request of the Corporation, against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred by them in connection with the defense or settlement of such action, or in connection with any appeal therein, except in relation to matters as to which such director or officer is adjudged to have been guilty of negligence or misconduct in the performance of their duty to the Corporation.
(b) The Corporation shall indemnify any person made a party to an action, suit or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, whether civil or criminal, brought to impose a liability or penalty on such person in their capacity of director, officer or employer of the Corporation, or of any other corporation which they served as such at the request of the Corporation, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, actually and necessarily incurred as a result of such action, suit or proceeding, or any appeal therein, if such director, officer or employer acted in good faith in the reasonable belief that such action was in the best interests of the Corporation, and in criminal actions or proceedings, without reasonable ground for belief that such action was unlawful. The termination of any such civil or criminal action, suit or proceeding by judgment, settlement, conviction or upon a plea or nolo contendere shall not in itself create a presumption that any such director or officer did not act in good faith in the reasonable belief that such action was in the best interests of the Corporation or that they had reasonable grounds for belief that such action was unlawful.
c) Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any By-Laws, agreement, vote of stockholders or otherwise.
IN WITNESS WHEREOF, we have hereunto set our hands and seals and acknowledged to be filed in the office of the Secretary of State the foregoing Amended Certificate of Incorporation, this
21
day of
October
,
1980.
|
|
|
Signed Peter G. Dornau
|
(SEAL)
|
PETER G. DORNAU, President
|
|
|
|
Signed Art Spector
|
(SEAL)
|
ART SPECTOR, Secretary
|
|
|
STATE OF FLORIDA )
|
) SS
|
COUNTY OF DADE )
|
|
BEFORE ME, the undersigned authority, duly authorized to administer oaths and take acknowledgements, personally appeared PETER G. DORNAU and ART SPECTOR, and they acknowledged before me that they signed the foregoing Certificate of Incorporation for the purposes therein expressed.
WITNESS my hand and official seal at Miami, Dade County, Florida, this
21
day of
October
,
1980.
|
Signed – Catherine Peterkins
|
|
NOTARY PUBLIC
|
|
My Commission Expires:
Notary Public, Florida, State at Large
My Commission Expires July 17, 1981
Bonded thru Jedco Insurance Agency.
AMENDED CERTIFICATE OF INCORPORATION
OF OCEAN BIO-CHEM, INC. FORMERLY KNOWN AS
STAR BRITE CORPORATION
|
Filed
1984 Oct 29, AM
11:24
SECRETARY OF
|
ARTICLE I
The name of the corporation shall be:
OCEAN BIO-CHEM, INC.
IN WITNESS WHEREOF, we have hereunto set our hands and seals and acknowledged to be filed in the office of the Secretary of State the foregoing Amended Certificate of Incorporation, this 25
th
day of October, 1984, by shareholders.
|
Signed Peter Dornau
|
|
PETER DORNAU, PRESIDENT
|
|
|
Signed Jeff Tieger
|
|
JEFF TIEGER, SECRETARY
|
|
STATE OF FLORIDA )
|
) SS
|
COUNTY OF
BROWARD
)
|
BEFORE ME, the undersigned authority, duly authorized to administer oaths and take acknowledgements, personally appeared PETER DORNAU and JEFF TIEGER, and they acknowledged before me that they signed the foregoing Certificate of Incorporation for the purposes therein expressed.
WITNESS my hand and official seal at Ft. Lauderdale, Broward County, Florida, this
25
th
day of
October
, 1984.
|
Signed Catherine Peterkins
|
|
NOTARY PUBLIC
|
|
My Commission Expires:
NOTARY PUBLIC STATE OF FLORIDA A LARGE
MY COMMISSION EXPIRES JULY 17, 1985
BONDED THROUGH GENERAL INS. UNDERWRITERS
ARTICLES OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF
OCEAN BIO-CHEM, INC.
|
FILED
94 MAY 20 PM 2:03
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
|
Adopted in accordance with the provisions
Of Chapter 607, Florida Statutes
PETER G. DORNAU, President and JEFFREY TIEGER, Secretary, of OCEAN BIO-CHEM, INC., a Florida corporation do hereby certify under the seal of said Corporation as follows:
FIRST: The name of the Corporation is “OCEAN BIO-CHEM, INC.”
SECOND: That the following is a true and correct copy of amended Article III of the Certificate of Incorporation of the Corporation (which Certificate of Incorporation was originally filed with the Secretary of State of the State of Florida on 11/13/73, amended on 10/23/80 and amended again on 10/29/84 as (i) unanimously approved and consented to by the Board of Directors of the Corporation on
April 13
, 1994 and (ii) by a vote of
1,821,976
FOR and
2,803
AGAINST by the holders of the Common Stock of the Corporation on May 17, 1994, such votes cast for this Amendment by the holders of the Common Stock being sufficient for approval of this Amendment by the holders of the Common Stock of the Corporation.
“ARTICLE III
The stock of this corporation shall be divided into 10,000,000 shares of stock, par value $.01 per share. All said stock shall be payable in cash, property, labor or services at a just valuation to be fixed by the Board of Directors at a meeting called for that purpose; property, labor or services may be purchased or paid for, with the capital stock, at a just valuation to be fixed by the Board of Directors at a meeting called for that purpose,”
THIRD: That the Directors (on
April 13
, 1994) and the Common Shareholders (on May 17, 1994) did approve an amendment to its Certificate of Incorporation as hereinabove set forth in Article Second. The number of votes cast FOR the amendment was sufficient for approval by the holders of Common Stock of the Corporation.
FOURTH: That such amendment has been duly adopted in accordance with the provisions of Chapter 607, Florida Statutes.
IN WITNESS WHEREOF, we, PETER G. DORNAU, President, and JEFFREY TIEGER, Secretary of OCEAN BIO-CHEM, INC. have signed these Articles of Amendment to the Certificate of Incorporation and caused the Corporate Seal of the Corporation to be hereunto affixed this
7
day of May, 1994.
|
Signed by Peter G. Dornau, President
|
(CORPORATE SEAL)
|
Peter G. Dornau, President
|
|
|
ATTEST:
|
|
Signed by Jeffrey Tieger, Secretary
|
|
Jeffrey Tieger, Secretary
|
|
STATE OF FLORIDA )
|
) SS
|
COUNTY OF
BROWARD
)
|
|
The foregoing instrument was acknowledged before me this
17
day of May, 1994, by PETER G. DORNAU, President of OCEAN BIO-CHEM, INC., a Florida corporation, the corporation described in the foregoing Articles of Amendment, known to me personally to be such, and who presented
driver’s license
as identification, and he, the said PETER G. DORNAU, as such President, duly executed said Articles of Amendment before me, and acknowledged the said Articles of Amendment to be his free act and deed and made on behalf of the Corporation; that the facts stated therein are true; that the signature of said President of said Corporation are in the handwriting of the said President of said Corporation and of the Secretary of said Corporation, respectively, and that the seal affixed to said certificate is the corporate seal of said Corporation.
|
NOTARY PUBLIC:
|
|
|
|
|
Sign:
|
Signed by Catherine Niman
|
|
Print:
|
Catherine Niman
|
|
|
State of Florida at Large
|
|
|
My Commission Expires:
|
(SEAL)
|
|
|
|
OFFICIAL NOTARY SEAL
CATHERINE NIMAN
NOTARY PUBLIC STATE OF FLORIDA
COMMISSION NO. CC292457
MY COMMISION EXP. JULY, 1987
|
BYLAWS
OF
OCEAN BIO-CHEM, INC.
ARTICLE I. MEETINGS OF SHAREHOLDERS
Sect
ion 1. Annual Meeting.
The annual meeting of the shareholders of this Corporation shall be held on the 22
nd
day of May of each year or at such other time and place designated by the Board of Directors of the Corporation. Business transacted at the annual meeting shall include the election of directors of the Corporation. If the designated day shall fall on a Sunday or legal holiday, then the meeting shall be held on the first business day thereafter.
Section 2. Special Meetings.
Special meetings of the Board of Directors shall be held when directed by the President or the Board of Directors, or when requested in writing by the shareholders of not less than 10% of all the shares entitled to vote at the meeting. A meeting requested by shareholders shall be called for a date not less than 10 or more than 60 days after the request is made, unless the shareholders requesting the meeting designate a later date. The call for the meeting shall be issued by the secretary, unless the President, Board of Directors, or shareholders requesting the meeting shall designate another person to do so.
Section 3. Place.
Meeting of shareholders shall be held at the principal place of business of the Corporation or at such other place as may be designated by the Board of Directors.
Section 4. Notice.
Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the meeting, either personally or by first class mail, by or at the direction of the President, the Secretary or the officer or persons calling the meeting to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail address to the shareholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meeting.
When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. If, however, after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given as provided in this Article to each shareholder of record on the new record date entitled to vote at such meeting.
Section 6. Shareholder Quorum and Voting.
A majority
of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders.
If a quorum is present, the affirmative vote of
a majority
of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders unless otherwise provided by law.
Section 7. Voting of Shares.
Each outstanding share shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders.
Section 8. Proxies.
A shareholder may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. No proxy shall be valid after the duration of 11 months from the date thereof unless otherwise provided in the proxy.
Section 9. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the Articles of Incorporation of this Corporation to be taken at any annual or special meeting of shareholders, or any action which may be taken at any annual or special meeting of shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon where present and voted, as is provided by law.
ARTICLE II. DIRECTORS
Section 1. Function.
All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors.
Section 2. Qualification.
Directors
need not
be residents of this state and shareholders of this Corporation.
Section 3. Compensation.
The Board of Directors
shall have authority to fix the compensation of directors.
Section 4. Presumption of Assent.
A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest.
Section 5. Number.
This Corporation shall have not less than
two (2)
directors nor more than nine (9) directors.
Section 6. Election and term.
Each person named in the Articles of Incorporation as a member of the initial Board of Directors shall hold office until the first annual meeting of shareholders, and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.
At the first annual meeting of the shareholders and at each annual meeting thereafter the shareholders shall elect directors to hold office until the next succeeding annual meeting. Each director shall hold office for a term for which he is elected and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.
Section 7. Vacancies.
Any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors may be filled by the affirmative vote of a majority of the remaining directors through less than a quorum of the Board of Directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the shareholders.
Section 8. Removal of Directors.
At a meeting of shareholders called expressly for that purpose, any director of the entire Board of Directors may be removed, with or without cause, by a vote of the holders of a
majority
of the shares then entitled to vote at an election of directors.
Section 9. Quorum and Voting.
A majority
of the number of directors fixed by these bylaws shall constitute a quorum for the transaction of business. The act of a
majority
of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 10. Executive and Other Committees.
The Board of Directors, by resolution adopted by a
majority
if the full Board of Directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution shall have and may exercise all the authority of the Board of Directors, except as is provided by law.
Section 11. Place of Meeting.
Regular and special meetings of the Board of Directors shall be held
at the corporate offices, 4041 S. W. 47
th
Avenue, Ft. Lauderdale, FL 33314.
Section 12. Time, Notice and Call of Meetings.
Regular meetings of the Board of Directors shall be held without notice on
immediately following the annual meeting of the shareholders.
Written notice of the time and place of special meetings of the Board of Directors shall be given to each director by personal delivery, telegram or cablegram at least
two (2)
days before the meeting or by notice mailed to the director at least
ten (10)
days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting, any objection to the transition of business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.
Meetings of the board of Directors may be called by the Chairman of the Board, by the President of the Corporation or by any two directors.
Members of the Board of Directors may participate in a meeting of such board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means constitute presence in person at a meeting.
Section 13. Action Without a Meeting.
Any action required to be taken at a meeting of the Board of Directors, or any action which may be taken at a meeting of the Board of Directors or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken, signed by all the directors, or all the members of the committee, as the case may be, is filed in the minutes of the proceedings of the board or of the committee. Such consent shall have the same effect as a unanimous vote.
ARTICLE III. OFFICERS
Section 1. Officers.
The officers of this Corporation shall consist of a president, a secretary and a treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the Board of Directors from time to time. Any two or more offices may be held by the same person.
Section 2. Duties.
The officers of this Corporation shall have the following duties:
The President shall be the chief executive officer of the Corporation, shall have general and active management of the business and affairs of the Corporation subject to the directions of the Board of Directors, shall preside at all meetings of the shareholders and Board of Directors
The Secretary shall have custody of, and maintain, all of the corporate records except the financial records; shall record the minutes of all meetings of the shareholders and Board of Directors, send all notices of all meetings and perform such other duties as may be prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial records, shall keep full and accurate accounts of receipts and disbursements and render accounts thereof at the annual meetings of shareholders and whenever else required by the Board of Directors or the President, and shall perform such duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers.
An officer or agent elected or appointed by the Board of Directors may be removed by the board whenever in its judgment the best interests of the Corporation will be served thereby.
Any vacancy in any office may be filled by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
Section 1. Issuance.
Every holder of shares in this Corporation shall be entitled to have a certificate representing all shares to which he is entitled. No certificate shall be issued for any share until such share is fully paid. Each certificate shall be maintained in a manner determined by the duly appointed Transfer Agent of the Corporation.
Section 2. Form.
Certificates representing shares in this Corporation shall be signed by the President or Vice President and the Secretary or an Assistant Secretary and may be sealed with the seal of this Corporation or a facsimile thereof. However, the signature of the duly appointed Transfer Agent of the Corporation placed upon any certificate, shall be an actual signature and not a facsimile, thereof.
Section 3. Transfer of Stock.
The Corporation or its duly authorized transfer agent shall register a stock certificate presented to it for transfer if the certificate is properly endorsed by the holder of record by or his duly authorized attorney. With respect to the actual transfer of certificates, a Power of Attorney, if any, will be retained by the duly appointed transfer agent of the Corporation, and will be filed with the related canceled certificate.
Section 4. Lost, Stolen or Destroyed Certificates.
In case of the alleged loss or destruction of any certificate of stock issued by the Corporation, no new certificate shall be issued by the duly appointed Transfer Agent of the Corporation in lieu thereof, unless there shall first be furnished an appropriate bond of indemnity in form, and issued by a surety company, satisfactory to the duly appointed Transfer Agent of the Corporation, in at least twice the then current market value of the stock represented by such lost or destroyed certificate, in which bond the duly appointed Transfer Agent of the Corporation shall be named as one of the obligees.
ARTICLE V. BOOKS AND RECORDS
Section 1. Books and Records.
This Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders, Board of Directors and committees of directors.
This Corporation shall keep at its registered office or principal place of business a record of its shareholders, giving the names and addresses of all shareholders and the number of the shares held by each.
Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.
Section 2. Shareholders’ Inspection Rights.
Any person who shall have been a holder of record of shares or of voting trust certificates therefor at least six months immediately preceding his demand or shall be the holder of record of, or the holder of record of voting trust certificates for, at least five percent of the outstanding shares of the Corporation, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose its relevant books and records of accounts, minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information.
Not later than four months after the close of each fiscal year, this Corporation shall prepare a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year, and a profit and loss statement showing the results of the operations of the Corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust certificates for shares of the Corporation, the Corporation shall mail to each shareholder or holder of voting trust certificates a copy of the most recent such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the registered office of the Corporation in this state, shall be kept for at least five years, and shall be subject to inspection during business hours by any shareholder or hold of voting trust certificates, in person or by agent.
ARTICLE VI. DIVIDENDS.
The Board of Directors of this Corporation may, from time to time, declare and the Corporation may pay dividends on it shares in cash, property or its own shares, except when the Corporation is insolvent or when the payment thereof would render the Corporation insolvent, subject to the provisions of the Florida Statutes.
ARTICLE VII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be in circular form.
ARTICLE VIII. AMENDMENT.
These bylaws may be altered, amended or repealed, and new bylaws may be adopted, by action of the Board of Directors.
ARTICLE IX. INDEMNIFICATION.
This Corporation may, in its discretion, indemnify any Director, Officer, employee, or agent in the following circumstances and in the following manner:
. The Corporation may indemnify any person who was or is a party to any proceeding, (other than an action by, or in the right of, the Corporation) by reason of the fact that he is or was a Director, Officer, employee, or agent of the corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another Corporation, partnership, joint venture, trust, or other enterprise, against liability incurred in connection with such proceeding, including any appeal thereof, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendre or its equivalent shall not of itself, create a presumption that the person did not act in good faith and in a manner which he reasonable believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
b. The Corporation may indemnify any person, who was or is a party to any proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Director, Officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses and amounts paid in settlement not exceeding, in the judgment of the Board of Directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonable incurred in connection with the defense or settlement of such proceeding, including an appeal thereof. Such indemnification shall be authorized if such person acted in good faith and in a manner he reasonable believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the cause, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
c. To the extent that a Director, Officer, employee, or agent of the Corporation has been successful on the merits of otherwise in defense of any proceeding referred to in this Article IX, Subsection a or Subsection b, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses actually and reasonably incurred by him in connection therewith.
d. Any indemnification under this Article IX, Subsection a or Subsection b, unless pursuant to a determination by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Director, Officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in this Article IX, Subsection a or Subsection b. Such determination shall be made
(i) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such proceeding;
(ii) if such a quorum is not obtainable or, even if obtainable by majority vote of a committee duly designated by the Board of Directors (in which Directors who are parties may participate) consisting solely of two or more Directors on at the time parties to the proceeding;
(iii) By independent legal counsel:
|
(a)
|
Selected by the Board of Directors prescribed in paragraph (i) and the committee cannot be designated under paragraph (ii), selected by majority vote of the full Board of Directors (in which Directors who are parties may participate); or
|
(iv) By the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such proceeding or, if no such quorum is obtainable by a majority vote of shareholders who were not parties to such proceeding.
e. Evaluation of the reasonableness of expenses and authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible. However, if the determination of permissibility is made by independent legal counsel, persons specified by Paragraph (iii) of Subsection d of this article IX shall evaluate the reasonableness of expenses and may authorize indemnification.
f. Expenses incurred by an Officer or Director in defending a civil or criminal proceeding may be paid by the Corporation in advance of the final disposition of such preceeding upon receipt of an undertaking by or on behalf of such Director or Officer to repay such amount if he is ultimately found not to be entitled to indemnification by the Corporation pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the Board of Directors deems appropriate.
g. The indemnification and advancement of expenses provided pursuant to this section are not exclusive, and a Corporation may make any other or further indemnification or advancement of expenses of any of its Directors, Officers, employees or agents, under any bylaw, agreement, vote of shareholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. However, indemnification of advancement of expenses shall not be made to or on behalf of any Director, Officer, employee, or agent if a judgment of other final adjudication establishes that his actions, or omissions to act, were material to the cause of action so adjudicated and constitute:
(i) A violation of the criminal law, unless the Director, Officer, employee, or agent had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful;
(ii) A transaction from which the Director, Officer, employee, or agent derived an improper personal benefit;
(iii) In the case of a Director, a circumstance under which the liability provisions of Chapter 607.144, Florida Statutes, are applicable; or
(iv) Willful misconduct or a conscious disregard for the best interests of the Corporation in a proceeding by or in the right of the corporation to procure a judgment in its favor or in a proceeding by or in the right of a shareholder.
h. Indemnification and advancement of expense as provided in this section shall continue as, unless otherwise provided when authorized or ratified, to a person who has ceased to be a Director, Officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person, unless otherwise provided when authorized or ratified.
i. Unless the Corporation’s Articles of Incorporation provided otherwise, notwithstanding the failure of the Corporation to provide indemnification, and despite any contrary determination of the Board or of the shareholders in the specific case, a Director, Officer, employee, or agent of the Corporation who is or was a party to a proceeding may apply for the indemnification or advancement of expenses, or both, to the court conducting the proceeding, to the circuit court, or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice that it considers necessary, may order indemnification and advancement of expenses, including expenses incurred in seeking court-ordered indemnification or advancement of expenses, if it determines that:
(i) The Director, Officer, employee, or agent is entitled to mandatory indemnification under Subsection c, in which case the court shall also order the Corporation to pay the Director reasonable expenses incurred in obtaining court-ordered indemnification or advancement of expenses.
(ii) The Director, Officer, employee, or agent is entitled to indemnification or advancement of expenses, or both, by virtue of the exercise by the Corporation of its power pursuant to Subsection g; or
(iii) The Director, Officer, employee, or agent is fairly and reasonably entitled to indemnification or advancement of expenses, or both, in view of all the relevant circumstances, regardless of whether such person met the standard of conduct set forth in Subsection a, Subsection b, or Subsection g.
j. For purposes of this section, the term “Corporation” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, so that any person who is or was a director, officer, employee, or agent, of a constituent corporation, or is or was serving at the request of a constituent corporation as director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, is in the same position under this section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
k. For purposes of the section:
(i) The term “other enterprises” includes employee benefit plans;
(ii)
The term “expenses” includes counsel fees, including those for appeal;
(iii)
The term “liability” includes obligations to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to any employee benefit plan), and expenses actually and reasonably incurred with respect to a proceeding;
(iv) The term “proceeding” includes any threatened, pending, or completed action, suit or other type of proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal;
(v) The term “agent” includes a volunteer’
(vi) The term “serving at the request of the Corporation” includes any Service as a Director, Officer, employee or agent of the Corporation that imposes duties on such persons, including duties relating to an employee benefit plan and its participants or beneficiaries; and
(vii) The term “not opposed to the best interest of the Corporation” describes the actions of a person who acts in good faith and in a manner he reasonably believes to be in the best interests of the participants and beneficiaries of an employee benefit plan.
l. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, Officer, employee, or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this section.
m. If any expenses or other amounts are paid by way of indemnification otherwise than by court order or action by the shareholders or by an insurance carrier pursuant to insurance maintained by the Corporation, the Corporation shall, not later than the time of delivery to shareholders of written notice of the next annual meeting of shareholders, unless such meeting is held within three (3) months from the date of such payment, and in any event, within fifteen (l5) months from the date of such payment, deliver either personally or by mail to each shareholder of record at the time entitled to vote for the election of Directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.
Exhibit 10.17
OPERATING AGREEMENT
OF
ODORSTAR TECHNOLOGY, LLC
a Florida Limited Liability Company
(Adopted Effective as of May 4, 2010)
The undersigned Members of
ODORSTAR TECHNOLOGY, LLC
, a Florida limited liability company (“Company”), hereby adopt the following Limited Liability Company Agreement (“Agreement”) which shall govern and control the management and regulation of the affairs of the Company, effective as of May 4, 2010 (“Effective Date”).
Preliminary Statement
A. The Company was formed on December 16, 2009, pursuant to a Articles of Organization filed as of such date (“Certificate”).
B. The Company is desirous of adopting this Agreement as its Operating Agreement, effective as of the Effective Date herein.
NOW, THEREFORE, for good and valuable consideration, the parties hereto agree as follows:
RECITALS; DEFINED TERMS
Recitals. The foregoing recitals are true and correct in every respect and are incorporated by reference into this Agreement.
Defined Terms. The following capitalized terms shall have the meanings as set forth in this Section 1.2. Capitalized terms defined in the introductory paragraph or recitals or elsewhere in this Agreement shall have the meanings assigned to them at the place first defined.
“Act” shall mean the Florida Limited Liability Company Act, as amended from time-to-time.
“
Affiliate
” shall mean, with respect to a specified Person, any Person that directly or indirectly Controls, is Controlled by, or is under common Control with, the specified Person.
“
All Members
” shall mean those Members who, in the aggregate, hold 100% of the Member Interests.
“
Available Net Cash Flow
” shall mean all cash received by the Company during any taxable year, less all cash disbursements made by the Company during such year, and less such reserves for repairs, replacements, working capital, contingencies and anticipated obligations (including debt service and capital improvements), as the Managing Members shall deem reasonably necessary. Available Net Cash Flow shall not include Capital Contributions but shall be increased by the reduction of any reserve previously established.
“
BBL
” shall mean BBL Distributors, LLC, a
New Jersey
limited liability company.
“
Capital Account
” shall mean the account established and maintained by the Company for each Member, as set forth in Section 3.5 hereof.
“
Capital Contributions
” shall mean with respect to any Member, the amount of money and the initial fair market value of any other property contributed to the Company by such Member with respect to the Membership Interest acquired or held by such Member (net of any liabilities secured by such contributed property that the Company is considered to assume or take subject to under Code Section 752).
“
Code
” shall mean the Internal Revenue Code of 1986, as amended from time-to-time, or any corresponding provision of any succeeding law.
“
Control
” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities representing at least fifty-one (51%) per cent of the Member Interests, by contract or otherwise.
“
Distribution
” means cash, cash equivalents or other assets distributed to Members by Company.
“
Manager
” shall mean
Ocean Bio- Chem, Inc.
,
or such other person
as may be appointed to serve as Manager of the Company pursuant to and in accordance with Section 6.1 or 6.3 hereof. The Members hereby agree that for so long as they are both Members,
certain
actions taken
by
Manager as set forth in Section 6.2 herein shall require the consent and written approval of both Members and, except as hereinafter provided, no other Person than the Manager shall have any right to participate in the business or affairs of the Company or to bind the Company or to execute documents that legally bind the Company in any way.
“
Members
” shall mean each Person signing this Agreement and identified on Exhibit “A” attached hereto, and any other Person(s) who subsequently become Members of the Company in accordance with this Agreement.
“
Member Interest
” shall mean the percentage economic and voting interest of a Member in the Company, as set forth in Exhibit “A” attached hereto and made a part hereof, which percentage interest may be changed consistent with Section 3.2 hereof. Member voting rights shall be proportionate to the Member Interest of the Members.
“
Minimum Distributions of Available Net Cash Flow
” is defined in Section 5.1.
“
OBCI
” shall mean Ocean Bio-Chem, Inc., a Florida corporation.
“
Person
” shall mean a natural person, corporation, association, partnership, joint venture, limited liability company, trust or other form of entity.
“
Profits
” and “
Losses
” shall mean the taxable “income” or “losses,” respectively, of the Company for each of its taxable years as determined for Federal income tax purposes in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in the taxable income or loss).
GENERAL PROVISIONS
Formation. The Company was formed on December 16, 2009, as a Florida liability company pursuant to the provisions of the Act.
Name of Company. The name of the Company is ODORSTAR TECHNOLOGY, LLC The Company may do business under that name or such other name as all Members may from time-to-time determine. If the Company does business under a name other than that set forth in its Certificate, the Company shall file a fictitious name certificate as required by local law.
Place of Business. The Company’s principal place of business shall initially be at 4041 SW 47th Avenue, Fort Lauderdale, FL 33314, or at such other place or places as the Members may from time-to-time determine.
Purpose. The purpose of the Company is: (a) to own and operate a business holding patents for the manufacture, packaging and sale of unique anti-mold, anti-bacterial products as described on Exhibit B attached hereto; (b) to exercise all powers enumerated in the Act necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein; and (c) to engage in any other lawful business activities allowed under the Act, as may be deemed by all Members to be in the best interests of the Company.
Term. The Company shall continue in existence until the Company is dissolved in accordance with the provisions set forth in the Certificate or, if earlier, upon the occurrence of an Event of Dissolution, as set forth in Section 10.1 hereof.
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; LOANS
Initial Capital Contributions. The Members hereby confirm that as their initial Capital Contributions to the Company, they will make contributions as set forth on Exhibit “A” attached hereto and made a part hereof, in exchange for their respective Member Interests.
Additional Capital Contributions. Upon unanimous consent, the Members may make additional Capital Contributions to the Company to the extent required by the business of the Company, in which case any such additional Capital Contributions shall be made in proportion to the Member’s respective Member Interests. The Members shall attempt to obtain additional financing as required by the business and the Company through loans in accordance with the provisions of Sections or 3.6 or 3.7. Failing the ability to obtain necessary loans, if the Members unanimously agree, the Members shall contribute equal amounts to the capital of the Company to the extent required. If a Member is unwilling or unable to contribute such additional monies, the other Member may still contribute and, in such event, the additional monies shall be considered a loan to the business to be repaid with interest at 5% over prime in two (2) years (with prepayment permitted).
If Member has lent monies to the Company pursuant to paragraph 3.2 hereof, such amount must be repaid, with interest within two (2) years of the date of the loan. Repayment of the interest on, and principal of, the loan shall take precedence over any distributions of cash to the Members.
If the loan, and interest thereon, is not repaid within two (2) years, then the lending Member shall have the right, within 15 days after the date on which the loan was to be repaid to demand an adjustment of the Member Interests so that the percentage interest of the Members shall reflect the monies contributed by each Member to the Company (after conversion of the overdue loan to equity). The recalculation shall be a fraction, the numerator of which is the total amount of all capital contributions (including the converted loans) to the Company by the Member and the denominator of which is the total amount of all capital contributions (and converted loans) made to the Company by all Members.
The recalculation of the Member Interests set forth in Section 3.2(b) shall not be affected in any way by the prior distribution, if any, to the Members of any capital contributed to the Company, nor shall it be affected by the repayment in whole or in part of any loans made by the Members to the Company.
All non-Contributing Members shall execute and deliver such documents as may be necessary to effectuate any adjustments of Member Interests pursuant to Section 3.2(b) hereof. Notwithstanding any failure of a non-Contributing Member to tender any such documents, upon the failure of a Member to make an additional Contribution as provided herein, the Member Interests of the Members in the Company shall be adjusted automatically as provided herein, and all references herein to a Member’s “Member Interest” shall thereafter be deemed to mean his Member Interest as adjusted pursuant to this Section 3.2.
No Interest on Capital Contributions. Members shall not be paid interest on their Capital Contributions.
Return of Capital Contributions; No Partition. Except as otherwise provided in this Agreement, no Member shall be entitled to a return of the Capital Contributions made by such Member until the full and complete winding-up and liquidation of the business and affairs of the Company. No Member shall have the right to bring any action for partition against the Company with respect to its property, or to demand and receive property other than cash in return for its Capital Contributions, and each Member waives any such rights.
Capital Accounts. The Company shall establish and maintain for each Member a Capital Account which shall be: (a) credited with the amount of that Member’s Capital Contributions as and when made; (b) credited or debited, as the case may be, with that Member’s allocated share of the Company’s Profits and Losses; (c) debited with the amount of any distributions to that Member; (d) debited with the amount of the Member’s allocable share of items of the Company described in Section 705(a)(2)(B) of the Code; and credited or debited with any other adjustments required under Treasury Regulations Section 1.704-1(b). If any interest in the Company is transferred in accordance with the terms of this Operating Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest. The foregoing provisions and the other provisions of this Operating Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations.
Third Party Loans.
Each of the Members agrees to and shall, to the extent required by the lending institution, provide a guarantee of half of the amount required to be guaranteed on each and every loan made to the Company. The Members shall be liable among themselves only in proportion to their respective Member Interests at the time payment is made under such guarantees, and to the extent that any Member/owner sustains a loss in excess of its/his proportionate share of such indebtedness, such Member/owner shall have a right of contribution from and against the other Member in proportion to such Member’s Member Interest. In such event, the Member entitled to contribution shall automatically have a contractual lien upon any and all future distributions from the Company to the other Member to the extent of such other Member’s contribution obligation. The Managing Members shall, from time to time as provided in this Agreement, distribute to the Member entitled to such contribution all amounts otherwise distributable to such other Member pursuant to this Agreement until the contribution obligations of such Member have been satisfied in full.
If any guarantee of such loans is provided by a Member or an Affiliate of such Member, then if the actions or inactions of such guarantor are the direct and proximate cause of the lending institution declaring the loan to be in default, then the applicable Member shall be liable to the Company and the other Member for any and all damages resulting therefrom.
ALLOCATION OF PROFITS AND LOSSES
Allocation of Profits or Losses. Except as otherwise provided in Section 4.2, below, Profits or Losses of the Company for any taxable year thereof shall be allocated among the Members, as follows:
Profits. Profits shall be allocated among the Members, pro rata, in accordance with their respective Member Interests.
Losses. Losses shall be allocated among the Members, pro rata, in accordance with their respective Member Interests.
Other Allocation Rules.
Limitation on Loss Allocations. Company Losses allocated to any Member pursuant to Section 4.1, above, shall not exceed the maximum amount of losses that can be so allocated without causing the Capital Account of such Member to have a deficit Capital Account balance (after taking into account reductions to such Capital Account balance pursuant to Treasury Regulations Sections 1.704-1(b)(ii)(d)(4), 1.704-1(b)(ii)(d)(5), and 1.704-1(b)(ii)(d)(6)) which exceeds the sum of (i) the amount of such deficit the Member is obligated to restore, and (ii) the amount of such deficit the Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5).
Qualified Income Offset. If any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) which results in such Member having a deficit Capital Account balance, or otherwise has a deficit Capital Account balance, which exceeds the sum of (i) the amount of such deficit the Member is obligated to restore, and (ii) the amount of such deficit the Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member will be specially allocated items of income and gain of the Company in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the deficit in such Member’s Capital Account as quickly as possible. Any special allocation made pursuant to this Section 4.2(b) shall be taken into account for purposes of determining subsequent allocations of income and losses, so that the total allocations will, to the extent possible, equal the allocations which would have been made if this Section 4.2(b) had not previously applied.
Minimum Gain Chargeback. Except as otherwise set forth in Treasury Regulations Section 1.704-2(f), and notwithstanding any other provision of this Article IV, if, during any taxable year of the Company, there is a net decrease in Company minimum gain (within the meaning of Treasury Regulations Section 1.704(2)(d)), each Member shall be specially allocated items of Company income and gain for such taxable year (and, if necessary, subsequent taxable years) in an amount equal to that Member’s share of the net decrease in Company minimum gain, as determined in accordance with Treasury Regulations Section 1.704-2(g). The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 4.2(c) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
Non-recourse Deductions. Non-recourse deductions (as such term is defined in Treasury Regulations Section 1.704-2(b)), if any, for any taxable year or other period shall be allocated among the Members in proportion to their respective Member Interests.
Member Non-recourse Deductions. Any Member non-recourse deductions (within the meaning of Treasury Regulations Section 1.704-2(i)) for any taxable year or other period shall be specially allocated to the Member who bears the risk of loss with respect to the Member non-recourse debt (within the meaning of Treasury Regulations Section 1.704-2(b)(4)) to which such Member non-recourse deductions are attributable, in accordance with Treasury Regulations Section 1.704-2(i).
Member Non-recourse Debt Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, and notwithstanding any other provision of this Article IV, if there is a net decrease in Member non-recourse debt minimum gain (within the meaning of Treasury Regulations Section 1.704-2(i)(3)) attributable to a Member non-recourse debt (within the meaning of Treasury Regulations Section 1.704-2(b)(4)) during any Company taxable year, each Member who has a share of that Member non-recourse debt minimum gain attributable to such Member non-recourse debt (as determined in accordance with Treasury Regulations Section 1.704-2(i)(5)) as of the beginning of the year shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Member’s share of the net decrease in the Member non-recourse debt minimum gain attributable to such Member non-recourse debt, as determined in accordance with Treasury Regulations Section 1.704-2(i)(4). The items to be so allocated shall be determined in a manner that is consistent with the provisions of Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Treasury Regulations. This Section 4.2(f) is intended to comply with the Member non-recourse debt minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
Code Section 704(c) Allocations. To the extent required under Code Section 704(c) and the Treasury Regulations promulgated thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take into account the difference, if any, between the tax basis of the property to the Company and its fair market value at the time of contribution to the Company.
Compliance with Treasury Regulations. It is the intention of the Members that the allocations of income and losses hereunder have substantial economic effect in accordance with the requirements set forth in the Treasury Regulations promulgated under Section 704(b) of the Code. Accordingly, allocations not specifically provided for in this Agreement shall be made in such manner as shall conform to the allocation rules and principles set forth in such Treasury Regulations as in effect from time to time, and the Capital Accounts of the Members shall be maintained in accordance with the provisions hereof construed and interpreted in light of such Treasury Regulations.
DISTRIBUTIONS
Distributions of Available Net Cash Flow. Available Net Cash Flow during any taxable year of the Company shall be distributed periodically to the Members in accordance with their respective Member Interests, at such times and in such amounts as determined by the Managing Members, to the extent such distributions are permitted under the Act; provided, no distributions shall be made to Members unless the Company has a current ratio in excess of 1.5 to 1 and any distributions shall not reduce the Company’s current ratio below 1.5 to 1, provided however, that each Member shall receive quarterly Minimum Distributions of Available Net Cash Flow (as modified below) in an amount which is no less than the product of: (a) the highest effective combined Federal and Florida State Income Tax rate imposed on the ordinary income of corporations or individuals, whichever is higher; and (b) the Company’s estimated taxable income for Federal income tax purposes allocable to such Member for the calendar quarter coincident with or immediately preceding the date of distribution of such year (“Minimum Distribution Requirement”). For purposes of this Minimum Distribution Requirement, the term “Available Net Cash Flow” shall not be reduced by the establishment of reserves for repairs, replacements, debt service, capital improvements, working capital or other contingencies of the Company.
Liquidating Distributions. Distributions in connection with the dissolution and winding up of the Company shall be made in accordance with Section 10.2 hereof.
MANAGEMENT OF THE COMPANY
Management. The Manager shall have responsibility for the specific functions as outlined below and shall be required to devote its best efforts to the business and affairs of the Company, subject to the oversight of the Members.
Rights and Powers of Manager. The Manager’s rights and powers are summarized below:
Apply for any licenses, patents, trademarks or copyrights, maintain all filings of patents and licenses on a timely basis, and keep all intangible assets of the Company in good standing;
Apply for any EPA registrations, maintain all filings of EPA registrations on a timely basis, and keep all EPA registrations in good standing;
Execute any agreements for the manufacture of product from Kinpak, Inc.;
Distribute funds to the Members in accordance with the provisions hereof;
Negotiate with third parties for the licensing of Odorstar patents;
Recommend new business opportunities to partners of Odorstar;
Be active in trade associations and attend applicable trade shows;
Coordinate sales and purchases of products with joint venture partners; and
Approve expenditures as they relate to the Company.
Appointment and Tenure of Manager. Manager shall serve until the first of the following occurs: (a) resignation or removal as Manager; (b) such Manager resigns; or (c) the bankruptcy of Manager. A Manager may be removed at any time, by the Member(s) who, individually or in the aggregate, own(s) at least fifty-one percent (51%) of the total Member Interests in which case the replacement Manager shall be appointed by both Member(s).
Compensation of Manager; Reimbursement for Expenses. The Manager shall not be entitled to receive compensation from the Company for the performance of its duties and responsibilities contained herein. The Company shall reimburse the Manager for all reasonable expenses incurred by it, or its principals in connection with and arising out of its performance of its duties and responsibilities contained herein, provided that such expenses are supported by adequate documentation.
Banking. Until changed by agreement of the parties, all checks in excess of $10,000 shall require two signatures, one from BBL and one from OBCI.
Indemnification. The Company shall defend, indemnify and hold harmless the Members, to the fullest extent permitted under the Act, from and against any and all liability, loss, expense or damage (including reasonable attorneys’ fees (including appeals) and disbursements) incurred or sustained by such Member(s) in the course of the conduct of the business of the Company and arising out of any act or omission to act occurring in good faith and within the scope of the authority, if any, conferred by this Agreement upon such Member(s).
BUSINESS OF THE COMPANY
Purpose. The Company shall exploit the patents and other proprietary information owned by it.
Manufacture. The Company shall cause to be manufactured products under its patents and other proprietary rights. Kinpak, Inc., a wholly-owned subsidiary of OBCI, shall be the sole and exclusive manufacturer under the Company’s patents and proprietary information.
Purchasers. The Company shall private label its products for BBL and the Starbrite, Inc. (“Starbrite”) subsidiary of OBCI. There shall no restriction on marketing such products on either BBL or Starbrite. Manufacture and sale for any other person, firm or entity shall require the unanimous approval of the Members.
Royalty from Starbrite to BBL. Starbrite shall enter into an agreement with BBL to pay BBL a royalty on all Odorstar patented products purchased by Starbrite from the Company’s manufacturer. The royalty calculation shall be based on each pouch purchased from the manufacturer. The percentage shall be determined between OCBI and BBL based on price points for various markets in order to be competitive. Said percentage shall not exceed 10% of net purchase price from manufacturer. Term of agreement shall coincide with term of patent.
Avantec Royalty. Company shall assume and pay to Avantec twenty cents ($.20) for each package of product sold by it in accordance with the Royalty Agreement between Avantec and BBL which it shall assume with the consent of Avantec after assignment by BBL.
Payments to Odorstar by Members. Members shall pay $.05 per packet purchased to Odorstar monthly for operation expenses. The amount, from time to time, shall be increased or decreased as situations arise. It is understood and agreed that OBCI may from time to time provide administrative services in support of Odorstar. Odorstar shall reimburse OBCI for all incremental costs incurred as a result of this support.
Each Member shall also pay an additional twenty cents ($.20) for each package of product purchased by it from Odorstar as the Avantec royalty.
MEETINGS OF MEMBERS
Meetings. A general meeting of the Members of the Company may be held each year on such date and at such time as the Members may designate for the transaction of such business as may properly come before the Members at such meeting. In addition, special meetings of the Members of the Company shall be held if called by either Member or if any Member delivers to the Members one or more written demands for the special meeting describing the purpose or purposes for which it is to be held. Such general or special meetings shall be held at the principal office of the Company or at such other such place as determined by the Members. If a Member cannot be physically present at a general or special meeting, that Member may participate in such meeting by telephone so long as all participating Members can hear and speak to each other.
Notice of Meeting. Written notice stating the place, day and hour of the meeting, indicating that it is being issued by or at the direction of the person or persons calling the meeting, and stating the purpose or purposes for which the meeting is called shall be delivered to each Member at least five (5) business days prior to the meeting. Notices may be delivered either personally, or by telephone (provided that the notice is communicated directly to the individual members/owners/principals of a Member), facsimile or other form of electronic communication, or by mail or courier service. Written notice is effective on the earlier of receipt or three (3) business days after deposit in the United States mail, addressed to the Member at the Member’s address as it appears on the records of the Company, with postage thereon prepaid.
Waiver of Notice. A Member may waive any notice required hereunder either before or after the date and time stated in the notice. The waiver must be in writing signed by the Member(s) entitled to such notice, and delivered to the other Member(s). Neither the business to be transacted at, nor the purpose of, any general or special meeting of the Members need be specified in any written waiver of notice. Attendance of a Member at any meeting of Members shall constitute a waiver of notice of such meeting, except if at the beginning of the meeting, the Member objects to the transaction of any business. Attendance shall also constitute a waiver of objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the Member objects to considering the matter when it is presented.
Quorum; Voting. All Members, represented in person or by proxy, shall constitute a quorum at any meeting of Members. If a quorum is present, the affirmative vote or written consent of All Members as to each matter to come before the Members shall be the act of the Members, unless the vote of a lesser proportion or number is otherwise specifically required by this Agreement, the Certificate or by the Act. Each Member shall be entitled to vote in proportion to his Member Interests.
Proxies. A Member or its attorney-in-fact, or any other person entitled to vote on behalf of a Member, may vote the Member’s Member Interest in person or by proxy. A Member may appoint a proxy to vote or otherwise act for such Member by signing an appointment form, either personally or by its attorney-in-fact. A telegram or cablegram appearing to have been transmitted by such person, or a photographic, photostatic, facsimile or equivalent reproduction of an appointment form is a sufficient appointment form. An appointment of a proxy is revocable by the Member unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest.
Action by Members Without a Meeting. Any action required or permitted to be taken by the Members at a meeting of said Members may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by Members who, in the aggregate, hold All Member Interests.
TRANSFERABILITY OF MEMBER INTERESTS;
WITHDRAWAL OF MEMBER; ADMISSION OF NEW MEMBERS
General Rule.
(1)
Except as otherwise set forth in this Agreement, Member Interests (including but not limited to, all economic rights associated therewith) may not be directly or indirectly transferred, sold, assigned, pledged or otherwise hypothecated, encumbered or disposed of, either voluntarily or involuntarily, by operation of law or otherwise (collectively referred to as a “Transfer”), without the prior unanimous written consent of the Members. The sale, transfer or issuance of stock or equity interests in a Member or the merger, consolidation or other transaction of a Member with or to any person or entity resulting in a change of Control shall be deemed to be a “Transfer” for purposes of this Agreement.
If the Members do not unanimously approve of the proposed Transfer of said Member Interests or of the Control of the Member, at the option of the remaining Member, either: (a) the Transfer shall be null and void and need not be recognized by the remaining Members if the attempted Transfer involved a voluntary action by the other Member o avoid or circumvent the restrictions on Transfer in this Article IX; or (b) the Member that attempted the Transfer and the transferee of said Member Interests or equity interests shall have no right to participate (or to continue to participate) in the management of the business and affairs of the Company or (in the case of the transferee) to become a Member thereof (or exercise any rights or powers of a Member) and, absent such unanimous written consent, the Member that attempted the Transfer or the transferee shall be entitled to receive only the share of Profits (or Losses) or other compensation by way of income and the return of contributions or the payment of other Distributions to which the transferor Member otherwise would be entitled.
Deemed Offer to Sell Member Interest. Any proposed Transfer of any part of a Member’s Interest shall be deemed to be an Offer by the proposed transferor to sell that Member’s entire Member Interest in the Company and the provisions of Section 9.2 shall be applied accordingly, subject to the provisions of Paragraph 9.3 hereof.
Bona Fide Offer to Purchase Member Interests.
Bona Fide Offer; Notice. If any Member (“Selling Member”) receives a bona fide written offer (“Offer”) from any independent party who is not an Affiliate of the party to whom the Offer is made (“Offeror”) to purchase all or any portion of the Selling Member’s Member Interest (“Offered Member Interest”) which the Selling Member desires to accept (“Proposed Sale”), the Selling Member shall be obligated to give written notice of the Proposed Sale (“Notice of Proposed Sale”) and a copy of the Offer to the Company and to the other Member (“Other Members”) within ten (10) days of the Selling Member’s receipt of such Offer.
First Option to Company. The Company shall have the first right and option to purchase all (but not less than all) of the Offered Member Interest (“First Option”) at the same price and on the same terms and conditions as set forth in the Offer. This First Option shall be exercisable by the Company by written notice to the Selling Member and to the Other Members (“Notice of Company Exercise”) within thirty (30) days following the Company’s receipt of the Notice of Proposed Sale. If the Company timely exercises this First Option, the Company shall have the greater of: (i) sixty (60) days from the date of Notice of Company Exercise; or (ii) the time period specified in the Offer, to close on the purchase of the Offered Member Interest. The Company’s exercise of the First Option shall require the affirmative vote of All Members (excluding the Member that owns the Offered Member Interest).
Second Option to Other Members. If the Company fails to timely exercise the First Option described above (or if the Company fails to timely close on the purchase of the Offered Member Interest), the Other Members shall have the next right and option to purchase all (but not less than all) of the Offered Member Interest, based on the proportionate ownership of Member Interests of the Other Members so electing to purchase, at the same pro rata price and on the same terms and conditions as set forth in the Offer (“Second Option”). This Second Option shall be exercisable by any or all of the Other Members by written notice to the Selling Member and to the Other Members (“Notice of Other Member Exercise”) within ninety (90) days following the Other Members’ receipt of the Notice of Proposed Sale (“Second Option Period”). If any or all of the Other Members timely exercise this Second Option, they shall have the greater of: (i) thirty (30) days from the date of Notice of Other Member Exercise; or (ii) the time period specified in the Offer, to close on the purchase of the Offered Member Interest.
Tag Along; Right to Require Purchase of Member Interests. If neither the Company nor the Other Members elect to purchase all of the Offered Member Interest, each of the Other Members shall have the right, by giving written notice to the Offeror and to the Selling Member prior to the end of the Second Option Period, to require that the Offeror purchase all (but not less than all) of the Member Interests then-owned by the Other Member(s), at the same pro rata price and on the same terms and conditions as set forth in the Notice of Proposed Sale.
Sale of Offered Member Interest. If neither the Company nor the Other Member elect to purchase all of the Offered Member Interest, the Selling Member shall be allowed to sell the Offered Member Interest but only to the Offeror and only at the same price and upon the same terms and conditions as set forth in the Offer; provided, that: (i) such sale is completed within three (3) months from the expiration of the Second Option Period; (ii) the Offeror executes a counterpart of this Agreement evidencing the Offeror’s agreement to be bound by all terms and conditions of this Agreement; and (iii) if the appropriate notice is given, the Offeror purchases from the Other Members all Member Interests required to be purchased pursuant to Section 9.2(d), above. Notwithstanding the full and complete satisfaction of the conditions set forth in the immediately preceding sentence, the Offeror shall not be granted management or voting rights in the Company without the prior written consent of all of the Members, and, in that regard, the provisions of Section 9.1(a)(ii)(B) shall apply.
Permitted Transferee. Notwithstanding anything herein to the contrary, each Member may at any time transfer all or any portion of that Member’s Member Interests to another Member. Members shall not require consent of the other Members, but such other Members shall be entitled to receive Notice thereof.
In the event of a deemed offer by a Member to sell its Member Interest pursuant to any of the provisions of this Article IX where the sales price and terms of sale have not been established through the offer of an independent third party to purchase such Member Interest, then the following shall apply:
The sales price for the Member Interest to be purchased from the applicable Member shall be its fair market value as of the date of the deemed offer, as such value is determined as hereinafter provided by either one appraiser agreed upon by both Members or if within fifteen (15) days they cannot agree upon one appraiser, then by three appraisers. Each appraiser must have experience in valuing the type of business conducted by the Company. The appraisers shall establish a fair market value for the Company, which shall then be multiplied by the percentage represented by the Member Interest to arrive at its fair market value. If the Members cannot agree upon one appraiser as aforesaid to establish the fair market value for the Company, then each Member shall choose one appraiser and such two appraisers together shall choose a third appraiser; the appraised value shall be an average of the determinations of the two appraisers whose determinations are the closest to each other, with the determination of the third appraiser to be disregarded. If only one appraiser is used, the cost of such appraiser shall be borne equally by the parties. If three appraisers are used, each Member shall bear the cost of the appraiser each has selected, and the cost of the third appraiser shall be borne equally by the parties. In establishing the fair market value of the Company, the appraiser shall be required to perform an appraisal of the real property as improved that is owned by the Company. In conducting such appraisal of the real property, all of the property and improvements owned and/or paid for by the tenant of the real property shall be excluded from the fair market value determination.
The valuation determined as aforesaid shall be deemed to include the full value of the Company, all assets thereof, both tangible and intangible, and all liabilities thereof, including loans, mortgages or other encumbrances of any kind whatsoever, if any, upon the assets of the Company. Such valuation shall be final and binding upon the parties, except for fraud or to the extent of arithmetic error.
Anything herein to the contrary notwithstanding, all periods for the Company or a Member to exercise an option to purchase the Member Interest from a Member shall be tolled until the sales price for the applicable Member Interest has been determined pursuant to Section 9.4(a) hereof.
Payment of the sales price shall be made as follows:
The purchaser(s) of the Member Interest shall pay to the selling Member on the closing date, twenty (20%) per cent of the sales price by cash, certified, bank or attorneys’ trust account check.
The balance of the sales price, together with interest thereon to be fixed on the closing date at the lowest rate which will avoid the imputing of interest thereon under the Internal Revenue Code of 1986, as amended, shall be payable in sixty (36) consecutive monthly installments of principal and interest, which installments shall be as nearly equal as possible, commencing on the one month anniversary of the closing date and continuing on the same day of each month thereafter until the fifth annual anniversary of the closing date, at which time all outstanding principal and interest shall be due and payable.
On the closing date, the purchaser(s) of the Member Interest shall execute one or more promissory notes (the Buyout Note(s)”) evidencing any payment obligations they may have under this Section 9.4. The Buyout Note(s) shall contain customary default and acceleration provisions.
As security for the payment of the Buyout Note(s), the purchaser(s) shall execute and deliver all documents necessary to pledge and collaterally assign the Member Interest so purchased by it; the purchaser(s), however, reserving all other rights in such Member Interest, including the right to vote thereon and receive distributions (other than liquidating distributions).
At the closing of such sale, the following additional matters shall take place:
All loans by the Company to the selling Member and all loans to the Company by the selling Member shall be repaid, regardless of the due dates thereof.
The other Member shall deliver a Hold Harmless and Indemnification Agreement to the Selling Member with respect to all future payments due under any and all Company obligations which Selling Member guaranteed.
The closing of the purchase and sale of the Member Interest shall take place within thirty (30) days after the option to Purchase the Member Interest is exercised.
Substituted Members. Except as expressly provided in this Article IX, no transferee or other assignee of all or any portion of a Member Interest shall have the right to become a substituted Member in place of his transferor or assignor, unless: (i) the prior written consent of all of the Members to such substitution shall have been obtained; and (ii) the transferee or assignee shall have executed a counterpart of this Agreement, as may be amended from time-to-time, evidencing such transferee’s or assignee’s agreement to be bound by the terms and conditions herein.
Withdrawal of Member. A Member shall not withdraw from the Company prior to its dissolution, except by a Transfer of his or her Member Interest in accordance with Article IX hereof.
Admission of New Members. Except as expressly provided in this Article IX, no Person shall be admitted to the Company as a new Member, unless (i) the prior written consent of all of the Members to such admission shall have been obtained; and (ii) the Person shall have executed a counterpart of this Agreement evidencing the intention and agreement of the new Member to be bound by the terms and conditions herein. The applicable terms and conditions of such admission, including, without limitation, the consideration payable by the new Member and the Member Interests to be acquired by the new Member, shall be determined by the unanimous written consent and approval of the Members.
DISSOLUTION AND LIQUIDATION
Events of Dissolution. The Company shall be dissolved and liquidated in the manner provided in this Agreement upon the occurrence of any of the following events (referred to herein as “Events of Dissolution”):
The written agreement of all of the Members to dissolve the Company;
Any other event causing a dissolution of the Company under the Act, except as otherwise provided herein.
Procedure for Liquidation of Company.
Following the occurrence of an Event of Dissolution, the Company’s activities shall be strictly limited to winding up its affairs by selling its assets in an orderly manner (so as to avoid the loss normally associated with forced sales), and applying the proceeds of such sale, together with other funds held by the Company, according to the following order of priority:
First, to the payment of debts and liabilities of the Company other than to Members, to the expenses of liquidation, and to the setting up of such reserves as may be deemed reasonably necessary by All Members for any contingent or unforeseen liabilities or obligations of the Company arising out of or in connection with the Company or its liquidation. Such reserves shall be placed in a separate account and applied from time-to-time to the payment of any such contingent or unforeseen liabilities and, at the expiration of six (6) months following the dissolution of the Company or at such other time as may be determined by All Members any remaining reserve amounts shall be distributed in the manner provided for in subparagraphs (ii) through (iv), below;
Next, to the repayment of any other unpaid debts and liabilities of the Company owed to the Members, together with applicable interest and any other expenses in connection therewith;
Next, to the Members in proportion to their positive Capital Account balances (as determined after taking into account all Capital Account adjustments for the Company’s taxable year during which such liquidation occurs) until such Capital Account balances have been reduced to zero; and
The balance, if any, shall be distributed to the Members, pro rata, in accordance with their respective Member Interests.
All income, gain and loss recognized by the Company after the date of an Event of Dissolution shall continue to be allocated among the Members according to the provisions of Article IV hereof.
The Members shall have exclusive authority and responsibility for liquidating the Company in the manner provided for herein; provided, however, that if there is no remaining Members, the last Member(s) shall appoint a liquidator (who may but need not be a Member) who shall be vested with the same authority and responsibility to liquidate the Company as would have been held by the Members.
Filing of Certificate of Dissolution. Upon the occurrence of an Event of Dissolution, the Members shall file Certificate of Dissolution with the Secretary of State of the State of Florida. If there are no remaining Members, such Certificate of Dissolution shall be filed by the last Person to be a Member or by the liquidator.
Date of Termination. The Company shall be terminated when all liquidation proceeds have been applied in the manner prescribed herein above and all known Company liabilities have been satisfied; provided, that the establishment of a reserve for contingent or unknown claims shall not continue the term of the Company if such reserve is placed in escrow for a reasonable time and provision is made for disbursement of the remaining balance thereof at the end of such time in the manner provided in Section 10.2(a)(i), above.
Final Statement. A final statement of the accounts of the Company as of the date of termination shall be prepared by its accountants as promptly as possible following the dissolution and liquidation of the Company, and a copy shall be furnished to each Member. Such statement shall set forth the actual or contemplated application and distribution of the Company assets pursuant to the provisions of this Article X.
Distributions in Kind. If any assets of the Company are distributed in kind to the Members, those assets shall be valued on the basis of their fair market value, and any Member entitled to any interest in those assets shall receive that interest as a tenant-in-common with all other Members so entitled. The fair market value of the assets shall be determined by an independent appraiser who shall be selected by All Members or mutual agreement by the Members as to value. The Profit or Loss for each unsold asset shall be determined as if the asset had been sold at its fair market value, and the Profits or Losses shall be allocated as provided in Article IV of this Agreement and shall be properly credited or charged to the Capital Accounts of the Members prior to the distribution of the assets in liquidation pursuant to Article X of this Agreement.
No Obligation to Restore Deficit Capital Account. No Member shall be obligated to restore a deficit Capital Account and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever.
BOOKS/RECORDS; ACCOUNTING AND TAX MATTERS
Bank Accounts. All funds of the Company shall be deposited in a bank account or accounts opened in the Company’s name. The Members shall determine the institution or institutions at which the accounts will be opened and maintained, the types of accounts. The Persons who will have authority with respect to the accounts and the funds therein are as provided in Section 6.5 hereof. No fidelity bond shall be required as to any of the authorized signatories unless the Members determine that a fidelity bond is required for the Manager.
Books and Records. The books and records of the Company shall be maintained at the principal office of the Company. Each Member has the right, upon reasonable request and during normal business hours, to inspect such records.
Annual Accounting Period; Taxable Year. The annual accounting period of the Company shall be its taxable year, or such other accounting period as determined by the Managing Members. The Company’s taxable year shall be determined by the Managing Member, subject to the requirements and limitations of the Code.
Financial Information. The Manager shall prepare a balance sheet and a statement of cash receipts and cash disbursements for the Company on a quarterly basis and shall cause such monthly financial reports to be provided to each of the Members no later than fifteen (15) days after the end of each calendar quarter. The annual financial statements of the Company shall be audited by the auditor for OBCI.
Tax Information. Within ninety (90) days after the end of each taxable year of the Company, the Manager shall cause to be sent to each Person who was a Member at any time during the taxable year then ended such information concerning the Company as is necessary to complete the Member’s income tax returns for that year.
Tax Matters Partner. OBCI shall serve as the “Tax Matters Partner,” within the meaning of Section 6231(a)(7) of the Code, to manage the administrative tax proceedings conducted at the Company level by the Internal Revenue Service with respect to Company matters, and shall have all the powers and duties expressly conferred on the Tax Matters Partner by the Code, as well as those powers and duties as are necessary and proper for the exercise of the Tax Matters Partner’s expressed powers and duties under the Code. The Company shall pay and be responsible for all reasonable costs and expenses incurred by the Tax Matters Partner in connection with the performance of its duties as Tax Matters Partner hereunder. Any Member (other than the Tax Matters Partner) who elects to participate in such proceedings shall be responsible for any expenses incurred by that Member in connection with such participation. In addition, the cost of any adjustments to a Member’s tax return shall be borne solely by the affected Member. Each of the Members agree to indemnify and hold Tax Matters Partner harmless from all loss including reasonable attorney fees incurred by Tax Matters Partner in acting on behalf of the Company as Tax Matters Partner.
Accounting Elections. The Company shall use the accrual method of accounting, or such other method of accounting selected by the Manager and approved in writing by All Members, subject to compliance with federal income tax laws. All elections required or permitted to be made by the Company under the Code shall be made by the Manager, subject to the prior written approval and consent of All Members.
Adjustment of Tax Basis. The Company shall in all appropriate cases, as determined by the Manager and subject to the prior written approval and consent of All Members, elect pursuant to Section 754 of the Code to adjust the basis of the Company property as allowed by Code Section 734(b) and 743(b). These elections will be filed as and when required by the Code.
Reserves. The Company shall maintain reserves for working capital and/or contingencies in such amounts as the Members deem necessary or appropriate.
NOTICES
All notices, demands, requests, offers or responses permitted or required to be given under this Agreement shall be in writing and shall be deemed given when: (i) personally delivered; or (ii) if sent by U.S. Certified Mail, Return Receipt Requested, postage prepaid, and addressed to the Members at their address as shown on the records of the Company and to the Company at its registered address, with the date of delivery to be evidenced by the date on the Return Receipt. Any Member may change the address to which notices shall be sent by written notice of such new or changed address given to the Company.
DISPUTES AND ARBITRATION
Any controversy arising under, out of, in connection with, or relating to, this Agreement, and any amendment thereof, or in connection with the dissolution of the Company, or resolution of any deadlock by the Members, shall be determined and settled by binding and final arbitration in Broward County, Florida, and in accordance with the Rules of the Commercial Division of the American Arbitration Association then in effect. Any arbitration decision shall be final and conclusive upon the parties, and a judgment thereon may be entered in any court of competent subject matter jurisdiction in Florida, and each party specifically consents and waives all objections to such jurisdiction and venue. In any arbitration proceeding, the parties shall have such rights as the arbitrators determine to interview witnesses and examine documents relating to the dispute.
Notwithstanding the immediately preceding paragraph, the arbitration panel shall consist of at least three (3) arbitrators who shall apply the law of the State of Florida. The costs of any such arbitration proceeding (including reasonable attorneys’ fees) shall be awarded in favor of the party substantially prevailing and against the party not so prevailing, provided, however, in the event there should be any ambiguity as to the substantially prevailing party hereto, the arbitrators, in their sole discretion, shall award any such cost of arbitration equitably between the parties taking into consideration the cause and nature of the dispute.
Notwithstanding any provision in this Agreement to the contrary, any party may institute proceedings for temporary or permanent injunctive relief or as otherwise necessary to maintain the status quo or to specifically enforce performance of this Agreement, in a court within Broward County in the State of Florida, prior to the commencement of arbitration or pending review by or enforcement of the arbitrator’s decree.
MISCELLANEOUS
Title to Company Property. All real and personal property (including patents, trademarks, copyrights and other intangible assets and intellectual property) acquired by the Company shall be acquired and held by the Company in its name.
Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as of such invalid or unenforceable provisions were omitted.
Further Assurances. The parties hereto agree that they will execute and deliver such further instruments and documents as may be required or appropriate to carry out the intent and purpose of this Agreement; provided, however, that no such documents or instruments shall change the substantive provisions or requirements of this Agreement without the consent of each party hereto.
Captions. Any titles or captions of Certificate or paragraphs contained in this Agreement are for convenience only and shall not be deemed part of the context of this Agreement.
Binding Effect. Except as otherwise herein provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors and all persons hereafter having or holding an interest in this Company, whether as assignees, substituted Members or otherwise. This Agreement shall also be binding upon any transferee who has received any Member Interest in accordance with the provisions of this Agreement and the heirs, legal representatives, successors and assigns of that transferee. This Agreement shall further be binding upon any person or entity to whom any Member Interest is transferred in violation of the provisions of this Agreement and the heirs, legal representatives, successors and assigns of that transferee.
Amendment. This Agreement may not be amended except by a written instrument executed by all of the Members.
Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter addressed herein, and all prior understandings and agreements, whether written or oral, between and among the parties hereto relating to the subject matter of this Agreement are merged in this Agreement. Each party specifically acknowledges, represents and warrants that they have not been induced to sign this agreement by any belief that the other will waive or modify the provisions of this Agreement in the future.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. Each party consents to the exclusive venue and jurisdiction of the courts or the Federal District Court or the Circuit Court of the State of Florida located in Broward County in the State of Florida.
Counterparts. This Agreement may be signed and executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement.
No Waiver of Breach. The waiver or inaction by the Company or any party to this Agreement or a breach of any condition of this Agreement by any Member shall not be construed as a waiver of any subsequent breach by the Member or such party, nor shall it constitute a waiver of the Company’s rights, actual or inherent. The failure of the Company or any party in any instance to insist upon a strict performance of the terms of this Agreement or to exercise any option herein shall not be construed as a waiver or a relinquishment in the future of such term or option, but that the same shall continue in full force and effect.
No Presumption. The fact that the first (or later) draft of this Agreement was prepared by counsel for either party shall create no presumptions and specifically shall not cause any ambiguities to be construed against the other party.
Plural and Gender. Whenever used herein, the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders.
Specific Performance. In addition to any other remedies available in law or equity, the parties hereto shall have the right to enforce this Agreement through specific performance of these provisions as contemplated herein.
Survival. All representations, warranties and other relevant provisions hereof without limitation shall survive the termination of this Agreement, and the liquidation or dissolution of the Company, and shall thereby continue in full force and effect at all times hereafter.
No Third Party Rights. None of the provisions contained in this Agreement shall be for the benefit of or enforceable by any third parties, including creditors of the Company.
Rights and Remedies Cumulative. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right not to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.
Offset. Once a Court of competent jurisdiction or an arbitration panel makes a decision on the matter, the Company shall have the right to set-off (reduce), on a dollar-for-dollar basis, against any and all distributions or other payments due to a Member hereunder for any damages, liabilities or costs incurred by the Company or any other Member as a result of that Member’s breach of any provisions or covenants herein, in addition to any other remedies that may be available to the Company at law or in equity.
Taxes Withheld or Paid on Behalf of Member. The Manager is hereby authorized (but not obligated) to withhold from distributions to a Member and to pay over to the appropriate federal, state, local or foreign government any amounts required to be withheld from or paid by such Member pursuant to the Code or any other federal, state, local or foreign law. All amounts withheld from distributions by the Manager pursuant to this Section 14.18 shall be treated as amounts distributed to such Member for all purposes under this Agreement. To the extent that amounts paid by the Company to any taxing authority on behalf of a Member have not been withheld from distributions to the affected Member, such amounts shall be treated as loans by the Company to such Member, bearing interest at the rate of twelve(12%) percent per annum and payable upon demand.
IN WITNESS WHEREOF, the parties have executed, or caused this Agreement to be executed, under seal, as of the date set forth hereinabove.
OCEAN BIO CHEM, INC.
By: _______________________________
As: President
|
BBL DISTRIBUTORS, LLC
By: ______________________________
As: Member
|
EXHIBIT A
TO
OPERATING AGREEMENT
OF
ODORSTAR TECHNOLOGY, LLC
A Florida Limited Liability Company
|
Member
|
|
InitialCapital
|
|
Members
|
Interests
|
|
Contributions
|
|
|
|
|
|
|
OBCI
|
|
|
50
|
%
|
|
$
|
371,497.09
|
|
|
|
|
|
|
|
|
|
|
BBL Distributors, Inc.
|
|
|
50
|
%
|
|
$
|
371,497.09
|
|
|
|
|
|
|
|
|
|
|
Assignment of Patents and Patent Applications:
(i) U.S. Patent No. 6,764,661, issued July 20, 2004;
(ii) U.S. Application No. 12/067,451, filed Feb. 12, 2009;
(iii) Canadian Application No. 2,415,254, filed June 26, 2001;
(iv) European Patent No. EP 01 948 767.7-2113.
Transfer of the EPA Registrations:
(i) 72874-2 TowerGuard;
(ii) 72874-6 NosGuard SG.
Assignment (and Assumption) of Royalty Agreement between BBL Distributors, LLC., Avantec Technologies, Inc., Harmony Gold Corp. and Odorstar Technology, LLC
Assets:
(i) CCS Sealer Type CC-8201;
(ii) Therm-O- Seal Model 140B-SCAB;
(iii) AMS Powder Filler Model A-1001148;
(iv) AMS Powder Filler Model A-1001149;
(v) Powder Filling Tooling.
EXHIBIT B
TO
OPERATING AGREEMENT
OF
ODORSTAR TECHNOLOGY, LLC
A Florida Limited Liability Company
BUSINESS DESCRIPTION
The purpose of the Company is: (a) to own and operate a business holding patents for the manufacture, packaging and sale of unique anti-mold, anti-bacterial products; (b) to exercise all powers enumerated in the Act necessary or convenient to the conduct, promotion or attainment of the business or purposes otherwise set forth herein; and (c) to engage in any other lawful business activities allowed under the Act, as may be deemed by all Members to be in the best interests of the Company.
Exhibit 10.19
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
|
|
|
|
|
|
Principal
$6,000,000.00
|
Loan Date
06-01-2010
|
Maturity
06-30-2011
|
Bank/App
01
|
Loan No
00230296030000000001
|
Account
0023029603
|
Officer
MSJ01
|
References in the shaded area are for Lender’s use
only and do not limit the applicability of this document to any particular loan or Item.
Any Item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
OCEAN BIO CHEM INC
(TIN:
59-1564329)
|
Lender:
|
REGIONS BANK
|
|
4041 SW 47
AVE
FT LAUDERDALE, FL 333144023
|
|
MONTGOMERY: MIDDLE MARKET COMMERCIAL
201 MONROE STREET
|
|
|
|
ALMG60077B
|
|
|
|
MONTGOMERY, AL 36104
|
|
|
|
|
THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated June 1, 2010, is made and executed between OCEAN BIO CHEM INC (“Borrower”) and REGIONS BANK (“Lender”) on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, Including those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) In granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of June 1, 2010, and shall continue in full force and effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.
LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time from the date or this Agreement to the Expiration Date, provided the aggregate amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or wholly prepay, and reborrow under this Agreement as follows:
Conditions Precedent to Each Advance. Lender’s obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following conditions precedent, with all documents, instruments, opinions, reports, and other items required under this Agreement to be in form and substance satisfactory to Lender:
(1) Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to Lender.
(2) Lender shall have received such opinions of councel, supplemental opinions, and documents as Lender may request.
(3) The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force and effect.
(4) All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be in full force and effect.
(5) Lender, at its option and for its sole benefit, shall have conducted an audit of Borrower’s Accounts, Inventory, books, records, and operations, and Lender shall be satisfied as to their condition.
(6) Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable.
(7) There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the compliance certificate called for in the paragraph below titled “Compliance Certificate.”
Making Loan Advances. Advances under this credit facility, as well as
directions for payment from Borrower’s accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option, may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business Day.
Mandatory Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower, Immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs
and charges, if any, not yet paid.
Loan Account. Lender shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements of Borrower’s account, which statements shall be considered to be correct and conclusively binding an Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower’s receipt of any such statement which Borrower deems to be incorrect.
COLLATERAL. To secure payment of the Primary Credit Facility and performance of all other Loans, obligations and duties owed by Borrower to Lender, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender’s Security Interests in the Collateral shall be continuing liens and shall Include the proceeds and products of the Collateral, including without limitation the proceeds of any Insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender:
Perfection of Security Interests. Borrower agrees to execute all documents perfecting Lender’s Security Interest and to take whatever actions are requested by Lender to perfect and continue Lender’s Security Interests in the Collateral. Upon request of Lender. Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender’s interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemparaneous with the execution of this Agreement. Borrower will execute one or more UCC financing statements and any similar statements as may be required by applicable law,
Borrower hereby Lender. Thereafter supplemental
schedules shall
be
delivered according to the following schedule:
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 0023029603000000001
|
(Continued)
|
Page 2
|
Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible Account;
(2)
All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; and (3) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect, examine, and audit Borrower’s records and to confirm with Account Debtors the accuracy of such Accounts.
Representations and Warranties Concerning Inventory. With respect to the Inventory, Borrower represents and warrants to Lender: (1) All Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms
to the requirements of the definition of Eligible Inventory; (2) All Inventory values listed on schedules delivered to Lender will be true and correct, subject to Immaterial variance; (3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by Lender in writing, all Eligible Inventory is now
and at all times hereafter will be in Borrower’s physical possession and shall not be held by others on consignment, sale on approval, or sale or return; (5) Except
as
reflected in the Inventory schedules delivered to Lender, all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects; (6) Eligible Inventory is
not
now and will not at any time hereafter be stored with a bailee, warehouseman, or similer party without Lender’s prior written consent, and, in such event, Borrower will concurrently at the time of
bailment cause any such bailee, warehouseman, or similar party to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory; and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect and examine the Inventory and to
check and test the same
as to quality, quantity, value, and condition.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to
the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender’s counsel.
Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.
Fees and Expenses Under This Agreement. Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable.
Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any indebtedness exists:
Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Florida. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary fillings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to
so
qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and
authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 4041 SW 47 AVE, FT LAUDERDALE, FL 333144023. Unless Borrower has designated otherwise in writing, the
principal office is the office at which Borrower keeps its books and records including its records concerning the Colleteral. Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or
any
change in Borrower’s name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.
Authorization. Borrower’s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.
Financial Information. Each of Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has
no material contingent obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender, and except for property tax lians for taxes not presently due and payable, Borrower owns and has good title to all of Borrower’s properties free and clear of all Security interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five
(5) years.
Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower’s ownership of the collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a)
any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person
Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 3
|
Lien Priority. Unless otherwise previously disclosed to Lender in writing. Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or [IILEGIBLE] any of the Collateral directly or indirectly securing repayment of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP
,
applied on a consistent basis, and permit Lender to examine and audit Borrower’s books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
Annual Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Lender.
Interim Statements. As soon as available, but in no event later than sixty (60) days after the end of each fiscal quarter. Borrower’s balance sheet and profit and loss statement for the period ended, prepared by Borrower in form satisfactory to Lender.
Additional Requirements.
Borrower agrees to provide a Monthly Borrowing Base Certificate, Accounts Receivable Aging Report & Inventory Listing within 30 days of Month-End.
All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.
Additional Information. Furnish such additional Information and statements, as Lender may request from time to time.
Financial Covenants and Ratios. Comply with the following covenants and ratios:
Additional Requirements.
Current Ratio (min): Should be 1.50x and will be tested Quarterly
Total Debt/TNW (max): Shall not exceed 2.50x and will be tested Quarterly
Fixed Charge Coverage (min): Maintain Fixed Charge Coverage Ratio minimum of 1.20x and will be tested on a Rolling 4 Quarter testing period
Defined as: NOI (net operating income) + depreciation + amortization + lease/rent divided by Interest expense + Income tax expense + rent + CMLTDpp (current maturities of long term debt prior period) + Maintenance CAPEX + Non-discretionary dividends.
P-Card shall be cross defaulted and cross -collateralized with the working capital line of credit.
Except as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets In Which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing Insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an Independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.
Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower’s books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in provide Lender with copies of any records it may request, all at Borrower’s expense.
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 4
|
Compliance Certificate. Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower’s chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set
forth in this Agreement are true and correct as
of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower’s part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality conceming, any intentional or unintentional action or omission on Borrower’s part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security interests.
LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note, or the maximum rate permitted by law, whichever is less
,
from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note’s maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, creat, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower’s accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined in the internal Revenue Code of 1986, as amended). Borrower may pay cash dividends on its
stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares or alter or amend Borrower’s capital structure.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surely or guarantor other than in the ordinary course of business.
Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower’s obligations under this Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower falls to make any payment when due under the Loan.
Other Defaults. Borrower falls to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s or any Grantor’s property or Borrower’s or any Grantor’s ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 5
|
[ILLEGIBLE] EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender’s option, all indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the “Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not effect Lender’s right to declare a default and to exercise its rights and remedies.
ADDITIONAL DEFINITIONS. Certain Defined Terms. For purposes of the foregoing financial covenants, the following terms are defined as follows:
Capital Expenditures means any expenditure for fixed assets or that is properly chargeable to capital account in accordance with generally accepted accounting principles.
Current Assets means assets that, in accordance with generally accepted accounting principles, are current assets; provided, however, that (a) inventories shall be taken into account on the basis of cost or current market value, whichever is lower, or, to the extent that such inventories are required for delivery under then existing contracts, the applicable contract price, (b) current assets shall not include any intangible assets or any securities that are not readily marketable, (c) securities included as current assets shall be taken into account at the current market price thereof, and (d) current assets shall not include any amounts due from or owed by any shareholder/partner/member or Affiliate of the Borrower or any of its Subsidiaries.
Current Liabilities means short-term obligations due within one year, including current maturities of long- term debts.
Debt means (a) all indebtedness, whether or not represented by bonds, debentures, notes or other securities, for the repayment of borrowed money, (b) all deferred indebtedness for the payment of the purchase price of property or assets purchased, (c) all capitalized lease obligations, (d) all indebtedness secured by any Lien on any property of such person, whether or not indebtedness secured thereby has been assumed, (e) all obligations with respect to any conditional sale contract or title retention agreement, (f) all indebtedness and obligations arising under acceptance facilities or in connection with surety or similar bonds, and the outstanding amount of all letters of credit issued for the account of such person, and (g) all obligations with respect to interest rate swap agreements.
Funded Debt means all Debt maturing by its terms more than one year after, or which is renewable or extendible at the option of the obligor to a date more than one year after, the date as of which Funded Debt is being determined.
Guaranteed Obligations means all guaranties, endorsements, assumptions and other contingent obligations in respect of, or to purchase or to otherwise acquire, any indebtedness, obligation or liability of another person.
Interest Expense means interest payable on Debt during the period in question.
Liabilities means all Debt and all other items (including taxes accrued as estimated) which, in accordance with generally accepted accounting principles, would be included in determining total liabilities as shown on the liabilities side of a balance sheet.
Lien means any mortgage, pledge, assignment, charge, encumbrance, lien, security title, security interest or other preferential arrangement.
Net Cash Flow for any period means net income (or the net deficit, if expenses and charges exceed revenues and other proper income credits) for such period, plus amounts that have been deducted for (a) depreciation and (b) amortization in determining net income for such period.
Net income means, for any period and with repect to any person or entity, the net earnings (after income taxes) of such period, determined on a FIFO basis and in accordance with GAAP, but excluding (a) any gain or loss arising from the sale of capital assets, (b) any gain arising from any write-up of assets, (c) earnings from any person or entity, substantially all of the assets of which have been acquired in any manner by the person or entity whose net income is measured, to the extent that such earnings were realized by such other person or entity prior to the date of such acquisition, (d) net earnings of any other person or entity in which the person or entity whose net income is measured has an ownership interest, unless such earnings have actually been received in the form of cash distributions, (e) the earnigs of any other person or entity to which assets of the person or entity whose net income is measured shall have been sold, transfered to, disposed of, or into which the person or entity whose net income is measured shall have merged, to the extent that such earnings arise prior to the date of such transaction, (f) any gain arising from the acquisition of any securities of the person or entity whose net income is measured, and (g) any other extraordinary or nonrecurring gains.
Net Income Available for interest Payments for any period means net income (or the net deficit, if expenses and charges exceed revenues and other proper income credits) for such period plus amounts that have been deducted for (a) Interest Expense, (b) Income and profit taxes, and (c) amortization of debt discount in determining net income for such period.
Permitted Contest means any appropriate proceeding conducted in good faith by the Borrower to contest any tax, assessment, charge, Lien or similar claim, during the pendency of which proceeding the enforcement of such tax, assessment, charge, Lien or claim is stayed; provided that the Borrower has set aside on its books or, if required by the Lender, deposited as cash collateral with the Lender, adequate cash reserves to assure the payment or any such tax, assessment, charge, Lien or claim.
Principal Maturities means principal maturing or coming due on Debt during the period in question.
Short-Term Debt means all Debt which by its terms matures within one year from, and which is not renewable at the option of the obligor to a date later than one year after, the date such Debt was incurred. Any Debt that is extended or renewed (other than pursuant to the option of the obligor) shall be deemed to have been incurred at the date of such extension or renewal.
Solvent means, as to any person or entity, such person or entity (i) owns property whose fair salable value is greater than the amount required to pay all of such person’s or entity’s debts (including contingent, subordinated, unmatured and unliquidated liabilities), (ii) owns property whose present fair salable value is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such person or entity, (iii) is able to pay all of its debts as such debts mature, (iv) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage, (v) is not “insolvent” within the meaning of Section 101(32) of the United States Bankruptcy Code, and (vi) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any of the Loan documents, or made any conveyance pursuant to or in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such person or entity or any of its Subsidiaries. As used herein, the term “fair salable value” of a person’s or entity’s assets means the amount that may be realized within a reasonable time, either through collection or sale of such assets at the regular market value, based upon the amount that could be obtained for such assets within such period by a capable and diligent seller from an interested buyer who is willing (but is under no compulsion) to purchase under ordinary selling conditions.
Subsidiary or Subsidiaries means with respect to any person or entity, (a) any corporation more than fifty percent (50%) of whose outstanding Income Tax Expense, (c) depreciation, (d) amortization, and (e) lease and rent expense.
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 6
|
Maintenance Capital Expenditures means the minimum amount of capital expenditures, not financed with Debt, needed to keep the company operating at its current level. The amount of Maintenance Capital Expenditures will be provided by the Borrower to the Lender in an acceptable form. If such information is not supplied or is not acceptable, Maintenance Capital Expenditures will be deemed to be 50% of depreciation expense.
MISCELLANEOUS PROVISIONS.
The following miscellaneous provisions are a part of this Agreement:
Amendments.
This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys’ Fees; Expenses.
Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.
Caption Headings.
Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.
Consent to Loan Participation.
Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interest. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.
Governing Law.
This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Alabama without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Alabama.
No Waiver by Lender.
Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or of any of Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices.
Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.
Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries and Affiliates of Borrower.
To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warrenty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates.
Successors and Assigns.
All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender.
Survival of Representations and Warranties.
Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower’s indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence.
Time is of the essence in the performance of this Agreement.
|
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 7
|
Waive Jury.
All parties to this agreement hereby waive the right to any
jury trial in any action, proceeding, or counterclaim brought by any Accounts $6,000,000,00), plus (b) 50.000% of the aggregate amount of Eligible Inventory (not to exceed in corresponding Loan amount based on Eligible inventory $6,000,000.00).
Business Day.
The words “Business Day” mean a day on which commercial banks are open in the State of Alabama.
Collateral. The word “Collateral” means all properly and assets granted as collateral security for a
Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease
or consignment Intended as a security device. or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. The word Collateral also includes without limitation all collateral described in the Collateral section of this Agreement.
Eligible Accounts. The words “Eligible Accounts” mean at any time, all of Borrower’s Accounts which contain selling terms and conditions acceptable to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits, and offsets of any nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts do not include:
(1) Accounts with respect to which the Account Debtor is employee or agent of Borrower.
(2) Accounts with respect to which the Account Debtor is a
subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors.
(3) Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional.
(4) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower.
(5) Accounts which are subject to dispute, counterclaim, or setoff.
(6) Accounts with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor.
(7) Accounts with respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be unsatisfactory.
(8) Accounts of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed
a
trustee, custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or falls generally to pay its debts (including its payrolls) as such debts become due.
(9) Accounts which have not been paid in full within 90 Days from the invoice date.
Eligible Inventory. The words “Eligible Inventory” mean, at any time, all of Borrower’s Inventory as defined below, except:
(1) Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties.
(2) Inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing.
Environmental Laws.
The words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
(“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default.
The words “Event of Default” mean any of the events of default set forth in this Agreement in the default section of this Agreement.
Expiration Date.
The words “Expiration Date” mean the date of termination of Lender’s commitment to lend under this Agreement.
GAAP.
The word “GAAP” means generally accepted accounting principles.
Grantor.
The word “Grantor” means each and all of the persons or entities granting a Security interest in any Collateral for the Loan, Including without limitation all Borrowers granting such a Security interest.
Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty.
The word “Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances.
The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The Words “Hazardous Substances” are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.
Indebtedness.
The word “Indebtedness” means the Indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other Indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.
Inventory.
The word “Inventory” means all of Borrower’s raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes Inventory temporarily out of Borrower’s custody or possession and all returns on Accounts.
Lender.
The word “Lender” means REGIONS BANK, its successors and assigns.
Loan.
The word “Loan” means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.
BUSINESS LOAN AGREEMENT (ASSET BASED)
|
Loan No: 00230296030000000001
|
(Continued)
|
Page 8
|
|
whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise.
|
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED JUNE 1, 2010.
THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
BORROWER:
|
|
|
OCEAN BIO CHEM INC
|
|
|
|
By:
|
|
(Seal)
|
|
PETER G. DORNAU, CEO of OCEAN BIO CHEM INC
|
|
LENDER:
|
|
REGIONS BANK
|
|
|
By:
|
|
(Seal)
|
|
Authorized Signer
|
|