EXHIBIT 10.12
TOWING AMERICA INC.
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PROMISSORY NOTE
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$1,000,000.00 October , 1997
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FOR VALUE RECEIVED, the undersigned, Towing America, Inc., a Delaware
corporation ("Borrower"), promises to pay to the order of Xxxx Xxxxxx
("Noteholder") in lawful money of the United States of America and in
immediately available funds, the principal amount of ONE MILLION AND 00/100
DOLLARS ($1,000,000.00), or such lesser amount as shall equal the aggregate
unpaid principal amount of the advances (the "Advances') made by the Noteholder
to the Borrower under this Note, together with interest on the unpaid principal
amount of each such Advance. Interest shall be caculated from the date of each
such Advance until paid at the rate of eight and one-half percent (8.5%) per
annum.
Each Advance hereunder shall be at the sole discretion of the Noteholder.
Borrower will repay this loan in one payment of all outstanding principal plus
all accrued unpaid interest on the earlier of (a) demand or (b) upon the
consummation of the Company's first firm commitment underwritten offering of
its securities pursuant to a registration statement under the Securities Act of
1933, as amended.
This Note may be prepaid, in its entirety (including the principal sum and
interest accrued to the date of payment) without the prior written consent of
Noteholder.
Payments by Xxxxxxxx shall be applied first to any and all accrued interest
through the payment date and second to the principal remaining due hereunder
or upon conversion hereof.
This Note evidences a straight line of credit. Once the $1,000,000.00 has
been advanced, Xxxxxxxx is not entitled to further Advances. Advances under this
Note may be requested orally or in writing by Borrower or by an authorized
person. Noteholder may, but need not, require that all oral requests be
confirmed in writing. The date and amount of each Advance shall be evidenced by
endorsements by Noteholder on Schedule A attached to this Note; provided that
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the failure of the Noteholder to make any such endorsement shall not limit or
otherwise affect the obligations of Borrower hereunder.
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Borrower waives presentment, demand for performance, notice of
nonperformance, protest, notice of protest, and notice of dishonor. No delay on
the part of Noteholder in exercising any right hereunder shall operate as a
waiver of such right under this Note.
If the indebtedness represented by this Note or any part thereof is
collected at law or in equity or in bankruptcy, receivership or other judicial
proceedings or if this Note is placed in the hands of attorneys for collection
after default, Xxxxxxxx agrees to pay, in addition to the principal and interest
payable hereon, reasonable attorneys' fees and costs incurred by Noteholder.
Borrower and Noteholder intend to comply at all times with applicable usury
laws. If at any time such laws would render usurious any amounts due under this
Note under applicable law, then it is Borrower's and Noteholder's express
intention that Borrower not be required to pay interest on this Note at a rate
in excess of the maximum lawful rate, that the provisions of this paragraph
shall control over all other provisions of this Note which may be in apparent
conflict hereunder, that such excess amount shall be immediately credited to the
principal balance of this Note (or, if this Note has been fully paid, refunded
by Noteholder to Borrower), and the provisions hereof shall immediately reformed
and the amounts thereafter decreased, so as to comply with the then applicable
usury law, but so as to permit the recovery of the fullest amount otherwise due
under this Note. Any such crediting or refund shall not cure or waive any
default by Borrower under this Note. The term "applicable law" as used in this
paragraph shall mean the laws of the State of California or the laws of the
United States, whichever laws allow the greater rate of interest, as such laws
now exist or may be changed or amended or come into effect in the future.
This Note shall be construed and enforced in accordance with, and governed
by, the internal laws of the State of California, excluding that body of law
applicable to conflicts of law.
THIS NOTE REPRESENTS THE FINAL AGREENENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
in its name this day of October, 1997.
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Borrower: TOWING AMERICA, DJC.
By: /s/ E. T. Xxxxxxx
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Name: E. T. Xxxxxxx
Title: CEO
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SCHEDULE A
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AMOUNT AND DATE OF ADVANCES
Amount of Advance Date of Advance
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$50,000 12/16/97
838 Aug. 97
554 Sept. 97
9,848 Oct. 97
3,042 Nov. 97
1,942 Dec. 97
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