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Toyota Motor Credit / Hometown Auto Retailers - Inventory Loan And Security Agreement
INVENTORY LOAN
AND SECURITY
AGREEMENT
TOYOTA MOTOR CREDIT CORPORATION
INVENTORY LOAN AND SECURITY AGREEMENT
This AGREEMENT, between TOYOTA MOTOR CREDIT CORPORATION ("TMCC"), located at 1515 W. 190th Street, P.O. Box 2958, Torrance, California 90509-2958, and the undersigned motor vehicle dealer whose name and address are set forth hereinbelow ("Dealer"), sets forth the terms under which TMCC may make loans (as hereinafter defined) to Dealer and the rights and obligations between TMCC and Dealer with regard to such loans.
1. Security Interest.
Dealer hereby grants to TMCC, as security for the payment of all liabilities and obligations of Dealer to TMCC of every kind and nature, whether or not under this Agreement and whether now existing or hereafter arising ("Liabilities"), a continuing lien on the collateral ("Collateral") as follows:
(a) all new Toyota-manufactured motor vehicles, all other new motor
vehicles, all used motor vehicles, all trucks, van conversions and
recreational vehicles, all additions and accessories, all parts,
accessories, furnishings and supplies, and inventory property of like kind
or type including replacements, substitutions, additions and returns,
whether now owned, in transit, or hereafter acquired; and
(b) all new and used machinery, equipment, tools, appliances, office
furniture and fixtures, office equipment and supplies, and goods of like
kind or type including replacements, substitutions or additions, whether
now owned or hereafter acquired; and
(c) all accounts receivable, documents, instruments, chattel paper,
security agreements, contract rights, policies and certificates of
insurance, advance warranty payments, incentive payments, rebates or
refunds, whether now owned or hereafter acquired; and
(d) all general intangibles, including, but not limited to, tax refunds,
license rights, franchise rights, copyrights, patent rights, trademarks,
service marks, trade names and goodwill, whether now owned or hereafter
acquired; and
(e) all cash and non-cash proceeds from the sale or disposition of the
foregoing, including proceeds of any insurance on any of the foregoing.
Dealer agrees to execute and deliver upon request such documents, including, without limitation, agreements, certificates of title and financing statements, as TMCC may consider necessary to maintain or perfect TMCC's security interest in such Collateral.
2. Loans.
(a) Loans on Motor Vehicles to be Acquired by Dealer. Once TMCC has
established a credit line in favor of Dealer, TMCC shall notify each
manufacturer or distributor of motor vehicles, which is specified by
Dealer and acceptable to TMCC (a "Seller"), that such Seller may ship
motor vehicles to Dealer and that payment for such vehicles will be made
by the payment by TMCC of drafts drawn by such Seller on TMCC, or by the
honoring of other payment instructions issued to TMCC, for the account of
Dealer; provided, however, that TMCC shall have no obligation to make any
payments, and Dealer shall not seek any loans, (i) in respect of any motor
vehicle, in an amount in excess of the sum of the invoice dealer cost of
such motor vehicle plus the cost of any option, which is offered to the
purchaser thereof for installation at the factory where the vehicle is
manufactured or the U.S. port facility through which the vehicle is
imported and (ii) in an aggregate amount outstanding at any time in excess
of the credit line so established. The amount of each and every such draft
or other payment instruction honored shall constitute a loan to Dealer
under this Agreement. TMCC shall have no responsibility for the validity,
sufficiency or genuineness of any such draft or other payment instruction.
TMCC may require that any bills of lading, certificates of origin, vehicle
invoices or documents of title be presented or delivered to TMCC as a
condition of payment of any such draft or other payment instruction.
(b) Loans on Other Motor Vehicles. TMCC may, at its option, make loans to
dealer from time to time, upon receipt of a schedule, certified as correct
by an authorized representative of Dealer, showing a description of one or
more motor vehicles (not previously financed under paragraph (a) of this
Section) as to which Dealer requests a loan at that time, together with
such other information and documents as TMCC may require. The making of
any loan by TMCC under this Section shall not obligate TMCC to make any
future or additional loans to Dealer.
3. Dealer Loan Account.
Each loan made under this Agreement shall be entered by TMCC as a debit in an accounting record to be maintained by TMCC in respect of Dealer (the "Dealer Loan Account"). TMCC shall credit all payments made by Dealer on account of indebtedness evidenced by the Dealer Loan Account and all cash proceeds of Collateral and debit all other charges, expenses and other items properly chargeable to Dealer. All credits shall be subject to receipt or final collection of cash by TMCC. TMCC shall mail or deliver to Dealer periodically a statement of account for the Dealer Loan Account reflecting all debits, credits and other activity during the preceding period, including, without limitation, payments made by Dealer in respect of motor vehicles financed hereunder ("Motor Vehicles") which were sold during such preceding period. Dealer agrees that if at any time the debit balance of the Dealer Loan Account exceeds the amount of the credit line extended by TMCC to Dealer hereunder, Dealer shall, upon receipt of a request by TMCC, remit to TMCC payment in such amount as may be necessary to eliminate such excess.
4. Payments.
(a) Continuing Obligations, Dealer hereby promises to make the following
payments to TMCC
(i) upon receipt of each billing statement described below, the
interest shown to be due on such billing statement, which interest shall
be computed, at the interest rate designated by TMCC from time to time, on
the daily debit balance in the Dealer Loan Account together with any per
diem charges expressed as a flat fee in connection with Motor Vehicles
actually financed by TMCC, including Motor Vehicles designated as
Demonstrators;
(ii) upon occurrence of either (A) the delivery by Dealer of any
Motor Vehicles to a purchaser or lessee thereof or (B) the receipt by
Dealer of payment for such Motor Vehicle, an amount substantially equal to
the outstanding principal balance of the loan made by TMCC to Dealer with
respect to such Motor Vehicle; and
(iii) on a monthly basis, all Demonstrator Payments then payable in
accordance with the provisions of Section 8 hereof, if any;
provided, however, that, notwithstanding anything to the contrary set
forth herein, within 12 months following the making by TMCC to Dealer of
each loan hereunder, Dealer shall repay in full the entire principal
balance of such loan, regardless of whether or not the Motor Vehicles in
respect of which such loan has been made shall have been sold by Dealer
and regardless of whether or not such Motor Vehicles have been designated
Demonstrators.
(b) Billing and Payment. TMCC shall mail or deliver to Dealer periodically
a billing statement (which may, at the option of TMCC, be included as part
of the statement of account referred to in Paragraph 3 hereof) setting
forth all payments then due from Dealer pursuant to this Agreement. Dealer
shall send payment due under this Agreement in the manner, and to the
address, specified by TMCC and in accordance with such procedures as TMCC
may establish from time to time.
5. Information Concerning Dealer.
Dealer hereby authorizes TMCC to obtain from any affiliate of TMCC and any Seller, and hereby consents to the delivery by any such affiliate or Seller to TMCC of, all such information concerning Dealer as TMCC may, from time to time, request. Dealer hereby agrees to provide TMCC with such information concerning Dealer and its financial condition as TMCC may, from time to time, request.
6. Insurance.
Dealer shall at all time have and maintain, with respect to all Collateral, insurance with such companies and in such amounts as are satisfactory to TMCC. Such insurance shall include coverage against the risks of fire (including so-called extended coverage) and theft and against such other risks as are usually insured against by owners of similar businesses and properties or as TMCC may otherwise require and, in the case of Motor Vehicles, against the risk of collision. With respect to Motor Vehicles, the amount of fire, theft and other risk insurance shall equal or exceed, at all times, the debit balance in the Dealer Loan Account. With regard to new Motor Vehicles actually financed by TMCC, including Motor Vehicles designated or defined as Demonstrators under paragraph 8, TMCC agrees to provide the required comprehensive insurance. With respect to each Motor Vehicle, said insurance shall be provided by TMCC as long as such Motor Vehicle remains part of Dealer inventory and has not been paid for in full.
As to all such insurance: (I) TMCC shall be named as a loss payee, (ii) Dealer shall cause to be delivered to TMCC or its designee copies of the insurance policies, together with the insurance certificates naming TMCC as a loss payee and (iii) TMCC or its designee shall be listed as the person to which insurance renewals and/or cancellations should be mailed by the insurance company with respect to each policy on which TMCC is named as a loss payee. If Dealer changes any insurance carrier or carriers, it shall promptly notify TMCC or its designee and shall cause to be delivered to TMCC or its designee copies of the new insurance policy, and a certificate of insurance naming TMCC as a loss payee. Dealer hereby authorizes TMCC to obtain insurance and to debit the Dealer Loan Account with the cost thereof (plus interest at the interest rate referred to in Section 4(a)(i) hereof until reimbursement by Dealer, in the event of dealer's failure to obtain such insurance, as herein provided, or to pay any premiums on existing policies.
7. Inspection.
Dealer shall keep all Motor Vehicles (other than Demonstrators, as hereinafter defined) at an approved Dealer location and shall not remove them except upon TMCC's written consent. Dealer shall allow TMCC to conduct an unannounced inspection of the Collateral (including all Demonstrators) wherever located and an examination of all Dealer's books and records pertaining to the Collateral at such times as TMCC shall require. Dealer shall make all Demonstrators available for inspection by TMCC, at an approved Dealer location, when and as requested by TMCC. Dealer shall cause an authorized representative of Dealer to acknowledge by signature each report prepared by a TMCC inspector.
8. Authority to Sell Motor Vehicles; Demonstrators.
(a) Provided Dealer is not in default in the performance of any of its
obligations under this agreement, Dealer shall have the right to store,
display for purposes of retail sale and sell or lease Motor Vehicles in
the ordinary course of its business. In addition, Dealer shall have the
right to use for demonstration purposes such Motor Vehicles as may be
approved in writing by TMCC ("Demonstrators").
(b) Demonstrator Payments shall mean, for each Motor Vehicle (whether or
not designated a Demonstrator), a monthly payment in an amount equal to
2.0% of the original principal balance of the loan made by TMCC in respect
of such Motor Vehicle. Demonstrator Payments shall commence in respect of
any Motor Vehicle within 30 days after the first to occur of (i) the date,
if any, on which such Motor Vehicle is designated a Demonstrator by Dealer
or (ii) the date on which the odometer reading in such Motor Vehicle
exceeds 500 miles.
9. Exchanges of Motor Vehicles Between Dealers.
Dealer may sell or exchange any Motor Vehicle of a new motor vehicle of another dealer. For purposes of Section 4(a)(ii) hereof, each such sale or exchange shall constitute the delivery of the Motor Vehicle so sold or exchanged to a purchaser thereof. If Dealer requests that TMCC finance a new motor vehicle acquired by Dealer in a purchase or exchange from or with another dealer, TMCC may, at its option, advance to Dealer, upon receipt of documentation satisfactory to TMCC and provided that such loan complies with all of the terms and conditions hereof, a loan hereunder in an amount equal to the invoice total dealer cost of such motor vehicle and debit the Dealer Loan Account therefor.
10. Representations and Warranties.
Dealer represents and warrants to TMCC that, as of the date of this Agreement and, as of each occasion on which Dealer requests a loan pursuant to this Agreement from TMCC or permits funds to be paid by TMCC to or for the account of Dealer pursuant to this Agreement:
(a) Dealer is (and will be) principally engaged in the retail sale of
motor vehicles and holds (and will hold) a valid franchise to sell motor
vehicles from the manufacturer or a distributor of all motor vehicles
which are offered for sale in new condition by Dealer. Dealer has (and
will have) all necessary licenses, permits, qualifications, franchise and
other approvals necessary lawfully to conduct its business.
(b) Except for the security interests granted by this Agreement, Dealer is
(and, as to Collateral to be acquired after the date hereof, will be) the
owner of the Collateral, free from any lien, security interest or
encumbrance.
(c) Except as otherwise disclosed in any exhibit to this Agreement, all
Collateral presently owned by Dealer, and all of Dealer's records
concerning sales, accounts and contract rights, are (and will be) kept at
the principal office of Dealer, the address of which is set forth below
and Dealer has (and will have) no other places of business.
(d) All information furnished to TMCC concerning the Collateral, or
otherwise for the purpose of obtaining loans or an extension of credit, is
and will be at the time the same is furnished, correct and complete in all
respects.
(e) Dealer has the power and authority to enter into this Agreement. The
execution and delivery of this Agreement, the borrowing of funds under
this Agreement, and consummation of all other transactions contemplated by
this Agreement have been duly authorized by all necessary action of
Dealer. This Agreement has been duly executed and delivered by Dealer and
constitutes the legal, biding and enforceable obligation of Dealer.
(f) Dealer shall only forward contracts, financing statements, security
agreements, and/or other materials and documents to TMCC which have been
executed by Dealer or its authorized representative.
11. Covenants of Dealer.
(a) Dealer shall keep the Collateral in good condition and shall not
damage or destroy the Collateral or permit the same to occur. Dealer shall
not use the Collateral in violation of an statute, ordinance or
governmental rule or regulation. Dealer shall at all times keep accurate
and complete records of the Collateral and its status.
(b) Dealer shall submit to TMCC, within 15 days following the end of each
month and within 120 days following the end of each fiscal year,
respectively, monthly and fiscal year-end financial statements in form
satisfactory to TMCC as certified by an authorized representative of
Dealer.
(c) Dealer shall keep the Collateral free from any adverse lien, security
interest or encumbrance (other than any such lien, security interest or
encumbrance which is disclosed in this Agreement) and shall defend the
Collateral against all claims and demands of all persons at any time
claiming any interest therein (other than any such lien, security interest
or encumbrance which is disclosed in this Agreement). Dealer shall
promptly pay when due all taxes and assessments upon the Collateral. If
TMCC discharges any such taxes, liens, security interests or encumbrances,
Dealer agrees to reimburse TMCC on demand for any such payment.
12. Events of Default; Acceleration.
Any or all Liabilities shall, at TMCC's option, become immediately due and payable, without notice or demand (which are hereby waived by Dealer), upon the occurrence of any of the following events of default: (i) default in the payment of any amount due and payable under this Agreement
or default in the payment, when due, of any of the Liabilities; (ii) default in the performance of any obligation or covenant contained or referred to in this Agreement; (iii) any warranty, representation or statement made or furnished to TMCC by or on behalf of Dealer having been breached, false or incomplete in any material respect when made or furnished; (iv) the loss, theft, damage or destruction (unless, in any such case, fully covered by insurance), or the unauthorized sale or encumbrance of, any of the Collateral or any levy, seizure or attachment thereof; (v) the commencement by or against Dealer of any bankruptcy, receivership or insolvency proceeding, the suspension of business or an assignment for the benefit of creditors by Dealer, or the issuance of an attachment, injunction or execution of the filing of a lien against Dealer or Dealer's property; or (vi) any change in the condition or affairs of Dealer or of any endorser, guarantor or surety for any of the liabilities which, in the opinion of TMCC, impairs TMCC's security or increases its risk.
13. Rights and Remedies on Default.
Upon the occurrence of any such event of default and at any time thereafter, TMCC may take any action it deems necessary to enforce this Agreement, including, without limitation, the remedies of a secured party under the Uniform Commercial Code and the remedies provided in this Agreement or in any other document executed by Dealer. Dealer shall, if TMCC so requests, assemble the Collateral and make it available to TMCC at a place to be designated by TMCC. TMCC shall have the right to enter upon the premises where the Collateral is located and remove it. Dealer shall pay all expenses and reimburse TMCC for any expenditures, including reasonable attorneys' fees and legal expenses, in connection with TMCC's exercise of any of its rights and remedies under this Agreement.
14. Indemnification.
Dealer agrees to indemnify, defend and hold harmless TMCC and all of its affiliates (and each of the respective officers, directors, representatives, agents and employees of TMCC and such affiliates) from and against any liabilities, damages, costs or expenses, of any nature whatsoever, which any of them may suffer or incur as a result of, or arising from or in connection with, any act or omission, on the part of Dealer in respect of any matter referred to in, contemplated by, or otherwise relating to, this Agreement.
15. Failure to Exercise Remedies.
The exercise of any right or remedy available to TMCC shall not operate as a waiver of any other right or remedy. The failure of TMCC to exercise or a delay by TMCC in exercising any right or remedy shall not operate as a waiver of such right or any other right. All of TMCC's rights and remedies shall be cumulative and may be exercised singularly or concurrently.
16. Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the parties to this Agreement and their respective successors and assigns; provided, however, that this Agreement and all rights and obligations under this Agreement may not be assigned or transferred by Dealer without TMCC's prior written consent and any purported assignment or transfer without such consent shall be void and without effect. For purposes of the foregoing, any change in control of the Dealer (whether by means of the transfer of stock or a partnership interest or otherwise) shall be deemed to constitute an assignment or transfer of this Agreement. Any obligation of TMCC, or any function to be performed by TMCC, under this Agreement may, at the sole option of TMCC, be delegated to, and performed by, any agent of TMCC, which agent shall have such power and authority as TMCC shall delegate to it.
17. Termination.
Whenever there are no outstanding Liabilities and no commitment on the part of TMCC under any agreement which might give rise to any obligation of Dealer, Dealer may terminate this Agreement upon written notice to TMCC. TMCC may terminate this Agreement at any time upon written notice to Dealer. Any termination of this Agreement shall not affect any obligation of TMCC or Dealer which may exist prior to such termination.
18. Validity; Complete Agreement; Amendments.
Any invalidity, in whole or in part, of any provision of this Agreement shall not affect the validity of any other provision hereof. This Agreement constitutes the complete understanding between the parties hereto with respect to the subject matter hereof and no alteration, amendment or proclamation of any of the terms and provisions hereof shall be valid unless made pursuant to an instrument in writing signed by both of said parties.
19. Governing Law.
This Agreement shall be construed and enforced in accordance with the laws of the State of California.
20. Notice.
Except as otherwise provided in this Agreement, all notices and other communications hereunder shall be in writing and shall be deemed duly given if and when personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) if to TMCC, to the address shown at the beginning of this Agreement; (b) if to Dealer, to the address shown below. Either party may change the address to which each such notice shall be sent by giving notice or communication of such address in the manner provided herein to the other party.
21. Gender; Number; Paragraph Headings.
Unless the context of this Agreement otherwise requires, the masculine, feminine or neuter gender each shall include the other genders, and the singular shall include the plural. The paragraph headings contained in this Agreement are for convenience of reference only and shall not limit or define the next hereof.
TOYOTA MOTOR CREDIT CORPORATION Muller Toyota, Inc.
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DEALER
DATE: 5/20/92 By: /s/ Gerry Schuckman DATE: 5/20/92 By: /s/ William Muller
-------------------- --------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
/S/ GERRY SCHUCKMAN /S/ William Muller Jr. President - ---------------------------------- ---------------------------------------
PRINTED NAME AND TITLE PRINTED NAME AND TITLE
Rt. 31 P.O. Box J
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STREET ADDRESS OF DEALER
Clinton, N.J. 08809
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CITY AND STATE
89-TMC-208 TMCC 1005 REV. 5/89
PREVIOUS EDITIONS MAY NOT BE USED
- ---------- -------------- ------------------------ ----------------------
Muller Chevrolet, Olds- Terry L. Berean, V.P.
New Floorplan mobile, Geo, Isuzu, Inc. /s/ Terry L. Berean - ---------- -------------- ------------------------ ---------------------- LIC NO. LOAN NO. BORROWER APPROVAL SIGNATURE
- --------------------------------------------------------------------------------
COMMERCIAL PROMISSORY NOTE [LOGO]
CoreStates
$5,000,000.00 January 20, 1998
FOR VALUE RECEIVED, each of the undersigned, jointly and severally if more than one (hereinafter collectively referred to as "Borrower"), promises to pay to the order of CORESTATES BANK, N.A.*, a national banking association (the "Bank"), at any of its banking offices in Pennsylvania, the principal amount of Five Million and 00/100************* DOLLARS, in lawful money of the United States, plus interest, to be paid as follows:
The principal of this Note and all interest accrued thereon, shall be payable in full before MAY 31, 1998 ("Maturity Date") unless such date is otherwise extended by Bank. Prior to the Maturity Date, the principal of this Note shall be repaid in accordance with the terms and conditions of a certain Business Loan and Security Agreement - Motor Vehicle Floorplan Financing Agreement, dated February 28, 1995, as amended ("Agreement") together with interest on the outstanding principal balance hereof payable monthly, as billed, at 1% above the Bank's Prime Rate, such rate to change each time the Prime Rate changes, effective on and as of the date of the change.
The principal balance due hereunder plus all accrued interest due hereon at any time and from time to time shall be that amount shown on the Bank's books and records and the statements submitted to Debtor by Bank in accordance with the Agreement, which shall, if no timely objection is made, be conclusive and irrefutable evidence of the amount of principal and interest due Bank. This Note is one of the Notes referred to in and is issued in conjunction with and under and subject to the terms and conditions of the Agreement, and is secured by the Collateral, as that term is defined in the Agreement. Upon the happening of an Event of Default, bank will be entitled to all of Bank's Rights Upon Default as specified herein and in the Agreement.
ADDITIONAL TERMS OF THIS NOTE - Each of the following provisions shall apply to this Note, to any extension or modification hereof and to the indebtedness evidenced hereby, except as otherwise expressly stated above or in a separate writing signed by Bank and Borrower.
INTEREST - Interest shall be calculated on the basis of a 360-day year and shall be charged for the actual number of days elapsed. Accrued interest shall be payable monthly. Accrued interest shall also be payable when the entire principal balance of this Note becomes due and payable (whether by demand, stated maturity or acceleration), or, if earlier, when such principal balance is actually paid to Bank. If the rate at which interest accrues is based on the "Prime Rate", that term is defined as the rate of interest for loans established by Bank from time to time at its prime rate. Said per annum rate of interest shall change each time Bank's prime rate shall change, effective on and as of the date of the change. Interest shall accrue on each disbursement hereunder from the date such disbursement is made by Bank, provided, however, that to the extent this Note represents a replacement, substitution, renewal or refinancing of existing indebtedness, interest shall accrue from the date hereof. Interest shall accrue on the unpaid balance hereof at the rate provided for in this Note until the entire unpaid balance has been paid in full, notwithstanding the entry of any judgment against Borrower.
PREPAYMENT - If this Note bears interest at a floating or variable rate and no floor or minimum rate is specified, Borrower may prepay all or any portion of the principal balance of this Note at any time, without premium or penalty. If not permitted under the preceding sentence, any prepayment of principal (including any principal repayment as a result of acceleration by Bank of this Note) shall require immediate payment to Bank of a prepayment fee equal t the amount, if any, by which the aggregate present value of scheduled principal and interest payments eliminated by the prepayment exceeds the principal amount being prepaid. Said present value shall be calculated by application of a discount rate determined by Bank in its reasonable judgment to be the yield-to-maturity at the time of prepayment on U.S. Treasury securities having a maturity which most closely approximates the final maturity date of the principal balance then outstanding. Whether or not a prepayment fee is required hereunder, prepayments shall be applied to scheduled installments of principal in the inverse order of their maturity, shall be accompanied by payment of accrued interest on the principal amount being prepaid and, unless this Note has been accelerated by Bank, shall not be permitted in an amount less than the scheduled principal installment immediately prior to final maturity of the outstanding principal balance.
COLLATERAL - As security for all indebtedness to Bank now or hereafter incurred by Borrower, under this Note or otherwise, Borrower grants Bank a lien upon and security interest in any securities, instruments or other personal property of Borrower now or hereafter in Bank's possession and in any deposit balances now or hereafter held by Bank for Borrower's account, and in all proceeds of any such personal property or deposit balances. Such liens and security interest shall be independent of Bank's right of setoff. This Note and the indebtedness evidenced hereby shall be additionally secured by any lien or security interest evidenced by a writing (whether now existing or hereafter executed) which contains a provision to the effect that such lien or security interest is intended to secure (a) this Note or indebtedness evidenced hereby or (b) any category of liabilities, obligations or indebtedness of Borrower to Bank which includes this Note or the indebtedness evidenced hereby, and all property subject to any such lien or security interest shall be collateral for this Note.
EVENTS OF DEFAULT - Each of the following shall be an Event of Default hereunder: (a) the nonpayment when due of any amount payable under this Note or under any obligation or indebtedness to Bank of Borrower or any person liable, either absolutely or contingently, for payment of any indebtedness evidenced hereby, including endorsers, guarantors and sureties (each such person is referred to as an "Obligor"); (b) if Borrower or any Obligor has failed to observe or perform any other existing or future agreement with Bank of any nature whatsoever; (c) if any representation, warranty, certificate, financial statement or other information made or given by Borrower or any Obligor to Bank is materially incorrect or misleading; (d) if Borrower or any Obligor shall become insolvent or make an assignment for the benefit of creditors or if any petition shall be filed by or against Borrower or any Obligor under any bankruptcy or insolvency law; (e) the entry of any judgment against Borrower or any Obligor which remains unsatisfied for 15 days or the issuance of any attachment, tax lien, levy or garnishment against any property of material value in which Borrower or any Obligor has an interest; (f) if any attachment, levy, garnishment or similar legal process is served upon Bank as a result of any claim against Borrower or any Obligor or against any property of Borrower or any Obligor; (g) the dissolution, merger, consolidation or change in control (as control is defined in rule 12b-2 under the Securities Exchange Act of 1934), of any Borrower which is a corporation or partnership, or the sale or transfer of any substantial portion of any of Borrower's assets, or if any agreement for such dissolution, merger, or consolidation, change in control, sale or transfer is entered into by Borrower, without the written consent of Bank; (h) the death of any Borrower or Obligor who is a natural person; (i) if Bank determines reasonably and in good faith that an event has occurred or a condition exists which has had, or is likely to have, a material adverse effect on the financial condition or creditworthiness of Borrower or any Obligor, or on the ability of Borrower or any Obligor to perform its obligation evidenced by this note; (j) if Borrower shall fail to remit promptly when due to the appropriate government agency or authorized depository, any amount collected or withheld from any employee of Borrower for payroll taxes, Social Security payments or similar payroll deductions; (k) if any Obligor shall attempt to terminate or disclaim such Obligor's liability for the indebtedness evidenced by this Note; (l) if Bank shall reasonably and in good faith determine and notify Borrower that any collateral for this Note or for the indebtedness evidenced hereby is insufficient as to quality or quantity; (m) if Borrower shall fail to pay when due any material indebtedness for borrowed money other than to Bank; or (n) if Borrower shall be notified of the failure of Borrower or any Obligor to provide financial and other information promptly when reasonably requested by Bank. If this note is payable on demand, Bank's right to demand payment hereof shall not be restricted or impaired by the absence, non-occurrence or waiver of an Event of Default, and it is understood that if this Note is payable on demand, Bank may demand payment at any time.
- -------------------------------------------------------------------------------- *CoreStates Bank, N.A. also conducts business as Philadelphia National Bank, as CoreStates First Pennsylvania Bank and as CoreStates Hamilton Bank.
8979-C 10/93
(including, if this Note is Payable on demand, any Event of Default resulting from Borrower's failure to make any payment hereunder when demanded), unless Bank elects otherwise, the entire unpaid balance of this Note and all accrued interest shall be immediately due and payable without notice to Borrower or any Obligor, and Bank may, immediately or at any time thereafter, exercise any or all of its rights and remedies hereunder or under any agreement or otherwise under applicable law against Borrower, any Obligor and any collateral. Bank may exercise its rights and remedies in any order and may, at its option, delay in or refrain from exercising some or all of its rights and remedies without prejudice thereto. Upon the occurrence of any such Event of Default or at any time thereafter, Bank may, at its option, and upon five days' written notice to Borrower, begin accruing interest on this Note, at a rate not to exceed five percent (5%) per annum in excess of the greater of (a) the rate of interest provided for above, or (b) the Prime Rate in effect from time to time on the unpaid principal balance hereof; provided, however, that no interest shall accrue hereunder in excess of the maximum rate permitted by law. All such additional interest shall be payable on demand.
NOTICE TO BORROWER - Any notice required to be given by Bank under the provisions of this Note shall be effective as to each Borrower and each Obligor when addressed to Borrower and deposited in the mail, postage prepaid, for delivery by first class mail at Borrower's mailing address as it appears on Bank's records.
DISBURSEMENTS AND PAYMENTS - The proceeds of this Note, or any portion thereof, may be credited by Bank to the deposit account of Borrower, or disbursed in any other manner requested by Borrower and approved by Bank. If Borrower so requests, Bank may, at its option, disburse the proceeds of this Note in more than one disbursement on the same or different dates, but except as otherwise agreed by Bank in writing, no action taken by Bank in response to any such request shall be deemed to create or shall imply the existence of any commitment or obligation to pay or credit the undisbursed portion of this Note. All payments due under this Note are to be made in immediately available funds. If Bank accepts payment in any other form, such payment shall not be deemed to have been made until the funds comprising such payment have actually been received by or made available to Bank. If Borrower is not an individual, Borrower authorizes Bank (but Bank shall have no obligation) to charge any deposit account in Borrower's name for any and all payments of principal, interest, or any other amounts due under this Note.
PAYMENT OF COSTS - In addition to the principal and interest payable hereunder, Borrower agrees to pay Bank, on demand, all costs and expenses (including reasonable attorneys' fees and disbursements) which may be incurred by Bank in the collection of this Note or the enforcement of Bank's rights and remedies hereunder.
REPRESENTATIONS BY BORROWER - If Borrower is a corporation or a general or limited partnership, Borrower represents and warrants that it is validly existing and in good standing in the jurisdiction under whose laws it was organized. If Borrower is a corporation, Borrower represents and warrants that the execution, delivery and performance of this Note are within Borrower's corporate powers, have been duly authorized by all necessary action by Borrower's Board of Directors, and are not in contravention of the terms of Borrower's charter, by-laws, or any resolution of its Board of Directors. If Borrower is a general or limited partnership, Borrower represents and warrants that the executio...
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