CHANGE IN TERMS AGREEMENT

  

Principal
$475,000.00

Loan Date

03-15-2012

Maturity
11-15-2012 Loan No
31000218 Call/Coll Account Officer
*** Initials         500BUSASTS      

 

References in the boxes above 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:

ECSI International, Inc.

790 Bloomfield Avenue, Suite C-1
Clifton, NJ 07012

Lender:

Atlantic Stewardship Bank
Lending

400 Hamburg Turnpike
Wayne, NJ 07470

       

 

Principal Amount: $475,000.00 Date of Agreement: March 15, 2012

 

DESCRIPTION OF EXISTING INDEBTEDNESS. Originate note dated March 15, 2011.

 

DESCRIPTION OF CHANGE IN TERMS. Extending the maturity date to November 15, 2012
and payment and late charge as Indicated below. All other terms and conditions
will remain the same.

 

PROMISE TO PAY. ECSI International, Inc. ("Borrower") promises to pay to
Atlantic Stewardship Bank ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Four Hundred Seventy-five Thousand &
00/100 Dollars ($475,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance. Borrower also promises to pay all applicable fees and expenses.

 

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on November 15, 2012. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning April 15, 2012, with all subsequent interest payments to
be due on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any unpaid
collection costs; then to any late charges; then to any accrued unpaid interest;
and then to principal. Borrower will pay Lender at Lender's address shown above
or at such other place as Lender may designate in writing.

 

VARIABLE INTEREST RATE. The interest rate on this loan is subject to change from
time to time based on changes in an independent Index which is the Prime rate as
published in the Wall Street Journal. When a range of rates has been published,
the higher of the rates will be used (the "Index"). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan. Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current Index rate upon
Borrower's request. The interest rate change will not occur more often than each
day. Borrower understands that Lender may make loans based on other rates as
well. The Index currently is 3.250% per annum. Interest on the unpaid principal
balance of this loan will be calculated as described in the "INTEREST
CALCULATION METHOD" paragraph using a rate of 0.250 percentage points over the
Index, adjusted if necessary for any minimum and maximum rate limitations
described below, resulting in an initial rate of 4.500% per annum based on a
year of 360 days. NOTICE: Under no circumstances will the interest rate on this
loan be less than 4.500% per annum or more than the maximum rate allowed by
applicable law.

 

INTEREST CALCULATION METHOD. Interest on this loan is computed on a 365/360
basis; that is, by applying the ratio of the Interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this loan is computed using this method.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment.
Lender may accept it without losing any of Lender's rights under this Agreement,
and Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to:
Atlantic Stewardship Bank, 400 Hamburg Turnpike Wayne, NJ 07470.

 

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment. This late
charge shall be paid to Lender by Borrower for the purpose of defraying the
expense incident to the handling of the delinquent payment.

 

INTEREST AFTER DEFAULT. Upon default, Including failure to pay upon final
maturity, the interest rate on this loan shall be increased by adding an
additional 3.000 percentage point margin ("Default Rate Margin"). The Default
Rate Margin shall also apply to each succeeding interest rate change that would
have applied had there been no default. However, in no event will the interest
rate exceed the maximum interest rate limitations under applicable law.

 

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

 

Payment Default. Borrower fails to make any payment when due under the
Indebtedness.

 

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.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf, or made by Guarantor, or any other
guarantor, endorser, surety, or accommodation party, under this Agreement or the
Related Documents in connection with the obtaining of the Indebtedness evidenced
by this Agreement or any security document directly or indirectly securing
repayment of this Agreement la 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.

 

Insolvency. The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Indebtedness. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Execution; Attachment. Any execution or attachment is levied against the
Collateral, end such execution or attachment is not set aside, discharged or
stayed within thirty (30) days after the same is levied.

 

Change in Zoning or Public Restriction. Any change in any zoning ordinance or
regulation or any other public restriction is enacted, adopted or implemented,
that limits or defines the uses which may be made of the Collateral such that
the present or intended use of the Collateral, as specified in the Related
Documents, would be in violation of such zoning ordinance or regulation or
public restriction, as changed.

 

Default Under Other Lien Documents. A default occurs under any other mortgage,
deed of trust or security agreement covering all or any portion of the
Collateral.

 

Judgment. Unless adequately covered by Insurance in the opinion of Lender, the
entry of a final Judgment for the payment of money involving more than ten
thousand dollars ($10,000.00) against Borrower and the failure by Borrower to
discharge the same, or cause it to be discharged, or bonded off to Lender's
satisfaction, within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to
any Guarantor, or any other guarantor, endorser, surety, or accommodation party
of any of the Indebtedness or any Guarantor, or any other guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any Guaranty of the Indebtedness
evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.

 

 

 

 

  CHANGE IN TERMS AGREEMENT   Loan No:31000218 (Continued) Page 2

 

Insecurity. Lender in good faith believes itself insecure.

 

Cure Provisions. If any default, other than a default in payment is curable and
if Borrower has not been given a notice of a breach of the same provision of
this Agreement within the preceding twelve (12) months, it may be cured if
Borrower, after Lender sends written notice to Borrower demanding cure of such
default: (1) cures the default within thirty (30) days; or (2) if the cure
requires more than thirty (30) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Agreement and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.

 

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses, whether or not there is a lawsuit, Including
attorneys' fees, expenses for bankruptcy proceedings (Including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

 

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
New Jersey without regard to its conflicts of law provisions. This Agreement has
been accepted by Lender in the State of New Jersey.

 

DISHONORED. ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.

 

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
indebtedness against any and ail such accounts, and, at Lender's option, to
administratively freeze Oil such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.

 

COLLATERAL. Borrower acknowledges this Agreement is secured by a lien on all
business assets .

 

LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances
under this Agreement may be requested only in writing by Borrower or as provided
in this paragraph. All communications, instructions, or directions by telephone
or otherwise to Lender are to be directed to Lender's office shown above. The
following person or persons are authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at
Lender's address shown above, written notice of revocation of such authority:
Arthur E. Barchenko, President of ECSI International, Inc; and Natalie
Barchenko, Treasurer of ECSI International, Inc. Borrower agrees to be liable
for all sums either: (A) advanced in accordance with the instructions of an
authorized person or (B) credited to any of Borrower's accounts with Lender. The
unpaid principal balance owing on this Agreement at any time may be evidenced by
endorsements on this Agreement or by Lender's internal records. Including daily
computer print-outs. Lender will have no obligation to advance funds under this
Agreement if: (A) Borrower or any guarantor is in default under the terms of
this Agreement or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Agreement;
(B) Borrower or any guarantor ceases doing business or is insolvent; (C) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Agreement or any other loan with Lender; (D)
Borrower has applied funds provided pursuant to this Agreement for purposes
other than those authorized by Lender; or (E) Lender in good faith believes
itself insecure.

 

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation (s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

 

FINANCIAL STATEMENTS. The Borrower will provide the Lender within one hundred
twenty (120) days of the end of each fiscal / calendar year, annual financial
statements and business tax returns prepared by a certified public accountant
satisfactory to the Lender. In addition, the Borrower will furnish upon request,
any additional financial Information the Bank deems necessary in support of and
during the term of this loan within thirty (30) days of such request. In
addition to but not in lieu of any other remedies available to the Bank, upon
the Borrower's failure to provide the statements and/or financial records
required to be provided by the Borrower and until such statements and/or
financial records are furnished, the interest rate under the note shall be
increased one percent (1.00%) above the rate of Interest then in affect on the
note.

 

DEPOSIT RELATIONSHIP. As part of the consideration to the Lender, the Borrower
shall maintain a primary operating deposit relationship with the Lender. If the
account relationship is not maintained with the Bank, the interest rate shall
immediately be increased one percent (1.00%}, .

 

CROSS DEFAULT. This Loan shall be cross-defaulted with all present and future
Loans to the Borrower.

 

SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on
transfer of Borrower's interest, this Agreement shall be binding upon and inure
to the benefit of-the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Borrower, Lender, without
notice to Borrower, may deal with Borrower's successors with reference to this
Agreement and the Indebtedness by way of forbearance or extension without
releasing Borrower from the obligations of this Agreement or liability under the
Indebtedness.

 

MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this
fact will not affect the rest of the Agreement. Lender may delay or forgo
enforcing any of its rights or remedies under this Agreement without losing
them. Borrower and any other person who signs, guarantees or endorses this
Agreement, to the extent allowed by law, waive presentment, demand for payment,
and notice of dishonor. Upon any change in the terms of this Agreement, and
unless otherwise expressly stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Agreement are joint and several.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE AGREEMENT.

 

BORROWER:

 

ECSI INTERNATIONAL, INC.                 By: /s/ Arthur E. Barctienko   By: /s/
Natalie Barchenko   Arthur E. Barctienko, President of ECSI International, Inc.
    Natalie Barchenko, Treasurer of ECSI International, Inc.

  

 

LASER PRO Lending, Ver. 5.50.00.000 Copr. Maryland Financial Solutions, Inc.
1897. 2012. All Rights Reserved. – NJ GRCFT\LF11\d200.FG TA-11567 PR-19