CREDIT NOTE
$1,000,000 May 28, 1999
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FOR VALUE RECEIVED, AZUREL LTD. ("Maker") promises to pay to the order
of XXXXX HOLDINGS, INC., or its successors or assigns, together with any other
holder hereof ("Holder" or "Bank"), at _______________, New York _____, or such
other place as Holder may from time to time designate in writing, in lawful
money of the United States of America, the aggregate unpaid principal amount of
One Million Dollars ($1,000,000), plus accrued interest and any applicable costs
or charges, as follows:
1) Payments.
(a) Monthly payments of accrued interest shall be due and
payable on the first day of the first month after the
date hereof and on the first day of every month
thereafter until this Note is paid in full.
(b) Maker shall have no obligation to repay any
outstanding principal balance hereof prior to the
Maturity Date, as hereinafter defined, unless
acceleration is made by Holder pursuant to the
provisions of this Note or the Credit Agreement or
the Pledge Security Agreement, each dated the date
hereof, between Maker and Bank (collectively the
"Credit and Security Agreements") whereupon the
entire outstanding principal balance shall be paid
(c) All principal and accrued interest hereunder shall be
paid in full on that date which is two calendar years
after the date of this instrument, or if not a
business day, on the next succeeding business day
(the "Maturity Date").
2) Interest. This Note shall bear interest computed daily on the
outstanding principal balance on the basis of a 360 day year, at a rate equal to
eight percent (8%) per annum, but in no event shall the interest rate be greater
than the maximum rate of interest allowed to be contracted by applicable law.
3) This Note may be prepaid in whole or in part any time without
premium or penalty. Any payment or prepayment hereunder shall be applied first
to unpaid costs of collection and late charges, if any, then to accrued and
unpaid interest and the balance, if any, to principal.
4) After maturity or acceleration, this Note shall bear interest at the
Default Interest Rate herein until paid in full. The "Default Interest Rate"
shall be the lesser of (i) five percent (5%) over the interest rate in effect
immediately prior to default and (ii) the Maximum Rate. Any judgment hereon
awarded to Holder shall bear interest at the highest allowable rate until paid.
5) Maker shall pay a late charge of two percent (2%) of any required
payment of principal or interest on this Note which is not received by Holder
within ten (10) days of when
such payment is due. The parties agree that this charge is a fair and reasonable
charge for the late payment and shall not be deemed a penalty.
This Note is executed pursuant to the Credit Agreement of even date and
is subject to all of the terms and conditions thereof, including the Events of
Default therein, provided that the terms of this Note shall apply in the event
of an inconsistency between the terms of the Credit Agreement and this Note.
This Note is secured pursuant to the terms of the Pledge Security Agreement of
even date.
In no event shall Maker be obligated to pay interest or payments in the
nature of interest in excess of the maximum rate of interest permitted by law
("Maximum Rate"). Any interest in excess of the Maximum Rate paid by Maker
("excess sum") shall be credited as a payment of principal, or if Maker so
request in writing, returned to Maker, or, if the indebtedness and other
obligations evidenced by this Note have been paid in full, returned to Maker
together with interest at the same rate as was paid by Maker during such period.
Any excess sum credited to principal shall be credited as of the date paid to
Xxxxxx, it being the intent of Holder to conform strictly to the limitations of
applicable laws governing the charging of interest.
In the event that this Note should be found not to be a negotiable
instrument, the parties hereto acknowledge and agree that Article 3 of the
Uniform Commercial Code, as now or hereafter in effect in the State of New York,
nevertheless sets forth the respective contracts, warranties, rights and
obligations of Holder and of Maker and any other person liable for payment
hereof, except to the extent that there can be no holder in due course hereof.
Maker hereby (a) expressly waives any valuation and appraisal,
presentment, demand for payment, notice of dishonor, protest, notice of
nonpayment or protest, all other forms of notice whatsoever, and diligence in
collection; (b) consents that Holder may, from time to time and without notice
or demand, (i) extend, rearrange, renew or postpone any or all payments and/or
(ii) release, exchange, add to or substitute all or any part of any collateral
for this Note; and (c) agrees that Xxxxxx, in order to enforce payment of this
Note, shall not be required first to institute any suit or to exhaust any of its
remedies against Maker or to attempt to realize on any collateral for this Note.
In the event that this Note is collected by legal action, or otherwise
with the advice of attorneys at law, Maker hereby agrees to pay all costs of
collection including reasonable attorneys' fees and expenses, whether or not
suit is brought, and whether incurred in connection with legal advice,
collection, trial, appeal, bankruptcy or other creditors' proceedings.
Holder may accept partial payments or payments marked "payment in full"
or "in satisfaction" or words to similar effect at any time. Acceptance of such
payments shall not affect or vary the duty of Maker to pay all obligations when
due hereunder, and shall not affect or impair the right of Holder to pursue all
remedies available to it hereunder, or under any of the other agreements
securing or guaranteeing payment hereof.
The remedies of Holder shall be cumulative and concurrent, and may be
pursued singularly, successively or together, at the sole discretion of Holder,
and may be exercised as often as occasion therefor shall arise. No act of
omission or commission of Holder, including
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specifically any failure to exercise or forbearance in the exercise of any
right, remedy or recourse, shall be deemed to be a waiver or release of the
same, such waiver or release to be effected only through a written document
executed by Xxxxxx and then only to the extent specifically recited therein. A
waiver or release with reference to any one event shall not be construed as
continuing or as constituting a course of dealing, nor shall it be construed as
a bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.
MAKER BY EXECUTING THIS NOTE OR ANY OTHER DOCUMENT CREATING SUCH
LIABILITY, WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION, WHETHER ARISING IN
CONTRACT OR TORT, BY STATUTE OR OTHERWISE, IN ANY WAY RELATED TO THIS NOTE OR TO
THE CREDIT AND SECURITY AGREEMENTS, OR OTHER LOAN DOCUMENT. MAKER HEREBY
IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF
THE STATE OF NEW YORK AND OF ANY FEDERAL COURT, IN EITHER CASE LOCATED IN NEW
YORK COUNTY IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER'S
EXTENDING CREDIT TO MAKER AND NO WAIVER OF LIMITATION OF HOLDER'S RIGHTS UNDER
THIS PARAGRAPH SHALL BE EFFECTIVE UNLESS IN WRITING AND MANUALLY SIGNED ON
XXXXXX'S BEHALF.
Maker acknowledges that the above paragraph has been expressly
bargained for by Xxxxxx as part of the loan evidenced hereby and that, but for
Maker's agreement, Xxxxxx would not have extended the loan for the term and with
the interest rate provided herein.
IN WITNESS WHEREOF, Xxxxx has executed this Note on the day and year
first above written.
By: /S/XXXXXX XXXXXX
Its: CHAIRMAN
