PROMISSORY NOTE
$2,500,000 July 22, 1997
(Date of Execution and Delivery)
LENDER: TRADELINK INTERNATIONAL LIMITED (hereinafter
termed "LENDER"), 0000 Xxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000-0000
BORROWER(S): VECTOR AEROMOTIVE CORPORATION, a Nevada
corporation, 000 Xxxxxx Xxxxxx, Xxxxx Xxxx Xxxxxxx, Xxxxxxx
00000
XXXXXXXX(S) REPRESENT HEREWITH THAT THE LOAN EVIDENCED IS
BEING OBTAINED PRIMARY FOR BUSINESS PURPOSES.
FOR VALUE RECEIVED: to wit, money loaned, the above-named;
undersigned BORROWER(s) (hereinafter collectively
termed "BORROWER"), jointly and severally (if more than one
BORROWER), promise(s) to pay to the order of LENDER at its
office in the above city, or wherever else LENDER may
specify, the sum of TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000), with interest paid as follows. From
the date of the first advance under this Note, interest
shall accrue and be paid at the annual rate of LENDER'S
PRIME RATE plus 2.0% as that rate may change from time to
time with changes to occur on the date the LENDER'S PRIME
RATE changes.
The Borrower shall pay interest and principal under this
Note as follows. Interest shall be payable monthly in
arrears commencing on the day that is thirty (30) days
after the date of this Note and continuing on the same day
of each consecutive month thereafter, and all principal
outstanding and accrued and unpaid interest shall be
payable in full ON DEMAND.
The undersigned agrees to pay a late charge equal to 5%
of each payment of principal and/or interest which is not
paid within 10 days of the date on which it is due. At
LENDER'S option, the rate of interest charged shall become
a rate equal to the lesser of (a) five (5) percentage
points above the rate on the Note otherwise in effect, or
(b) the highest rate allowed by the law of the State of
Florida, commencing with and continuing for so long as this
Note is in Default (as hereinafter defined). Further, upon
XXXXXXXX'S Default and where XXXXXX deems it necessary or
proper to employ an attorney to enforce collection of any
unpaid balance or to otherwise protect its interests
hereunder, then XXXXXXXX agrees to pay to the LENDER
reasonable attorney's and legal fees for the services and
expenses of counsel, paralegals and others employed after
maturity or default to collect this Note, whether or not
suit be brought, and whether incurred in connection with
collection, trial, appeal, bankruptcy proceedings or
otherwise, and to indemnify and to hold the LENDER
harmless against liability for the payment of state
documentary stamp taxes, intangible taxes and other taxes
(including interest and penalties, if any) which may be
determined to be payable with respect to this transaction.
If the interest provision contained herein refers to
"LENDER'S PRIME RATE," the LENDER'S PRIME RATE shall be the
prime rate as published in the Wall Street Journal ("WSJ")
as of the date of this Note ("WSJ Prime Rate"). The
interest rate will change from time to time as the WSJ
Prime Rate changes in an amount equal to the change in the
WSJ Prime Rate, but will not change more often than once a
month which will occur on the first day of each calendar
month and will be based on the prime rate published in the
WSJ on the 25th of the prior calendar month. If more than
one rate is published, the highest rate published shall
apply; and if the 25th or the date of closing falls on a
day when the WSJ Prime Rate is not published, the WSJ Prime
Rate shall be the rate published on the last day prior to
the 25th or the date of closing. The BORROWER understands
and agrees that the WSJ Prime Rate is not represented or
intended to be the lowest or most favorable rate offered by
LENDER to any of its borrowers.
PAYMENT of this Note, all obligations of the undersigned
XXXXXXXX hereunder and under the Security Agreement defined
below ("OBLIGATIONS") to LENDER, its successors and
assigns, is secured, inter alia (and includes the terms and
obligations set forth therein), by a valid, subsisting Loan
and Security Agreement made by and between BORROWER and
LENDER (the "Loan Agreement") describing certain personal
property (the "COLLATERAL"), and by this reference is
incorporated herein.
If an Event of Default under this Note occurs or if the
BORROWER violates any of the terms or breaches any of the
conditions of the Loan Agreement, the entire principal sum
and accrued interest shall become due and payable without
notice unless otherwise provided in the Loan Agreement at
the option of the LENDER. TIME BEING OF THE ESSENCE OF
THIS NOTE. Failure to exercise this option shall not
constitute a waiver of the right to exercise the same at
any other time. Upon such Default, the principal of the
Note and any part thereof, and accrued unpaid interest, if
any, shall bear interest at the rate of the then highest
legal rate permissible by law. All parties liable for the
payment of this Note agree to pay the LENDER hereof
reasonable attorneys' fees for the services and expenses of
counsel employed after maturity or Default to collect this
Note (including any appeals relating to such enforcement
proceedings), or to protect or enforce the security hereto,
whether or not suit be brought. Notwithstanding any other
provisions of this Note, LENDER may, in the sole discretion
of LENDER, accept payments under this Note made by BORROWER
after any Default has occurred, without waiving any of
LENDER'S rights or remedies under this Note.
The remedies of LENDER as provided herein and in the
Loan Agreement shall be cumulative and concurrent, and may
be pursued singly, successively or together, at the sole
discretion of LENDER, and may be exercised as often as
occasion therefor shall arise. No act of omission or
commission of LENDER, including specifically any failure to
exercise any right, remedy or recourse, shall be effective
as a waiver thereof unless it is set forth in a written
document executed by XXXXXX and then only to the extent
specifically recited therein. A waiver or release with
reference to one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to any subsequent
event.
BORROWER and all sureties, endorsers and guarantors of
this Note, jointly and severally, hereby (a) waive demand,
presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, notice of
acceleration after Default and all other notices, filing of
suit and diligence in collecting this Note, in enforcing
any of the security rights or in proceeding against the
COLLATERAL; (b) agree to any substitution, exchange,
addition or release of any of the COLLATERAL or the
addition or release of any party or person primarily or
secondarily liable hereon; (c) agree that LENDER shall not
be required first to institute any suit, or to exhaust his,
their or its remedies against BORROWER or any other person
or party to become liable hereunder or against the
COLLATERAL in order to enforce payment of this Note; (d)
consent to any extension, rearrangement, renewal or
postponement of time of payment of this Note and to any
other indulgence with respect hereto without notice,
consent or consideration to any of the foregoing (except
the express written release by LENDER of any such person),
they shall be and remain jointly and severally, directly
and primarily, liable for all sums due under this Note and
the Loan Agreement.
As used herein, the words "BORROWER" and "LENDER" shall
be deemed to include BORROWER and XXXXXX as defined herein
and their respective heirs, personal representatives,
successors and assigns.
This Note is executed and delivered at the Place of
Execution and shall be construed and enforced in accordance
with the laws of the State of Florida.
Anything contained herein to the contrary
notwithstanding, if for any reason the effective rate of
interest on this Note should exceed the maximum lawful
rate, the effective rate shall be deemed reduced to and
shall be such maximum lawful rate, and any sums of interest
which have been collected in excess of such maximum lawful
rate shall be applied as a credit against the unpaid
balance due hereunder and thereafter delivered to BORROWER.
Under no circumstances shall BORROWER, or any parties
liable for the payment of this Note, be required to pay
interest in excess of the maximum rate allowed by
applicable law.
Interest is computed on the basis of a 360-day year for
the actual number of days in the interest period
(Actual/360 Computation) unless indicated below. LENDER'S
Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal)
interest rate for a year's period and then dividing said
rate by 360 to determine the daily periodic rate to be
applied for each day in the interest period. Application
of such computation produces an annualized effective
interest rate exceeding that of the nominal rate.
At LENDER'S option, any repayments of this Note, other
than by U.S. currency, will not be credited to the
outstanding loan balance until XXXXXX receives collected
funds.
In the event any provision(s) of this instrument shall
be left blank or incomplete, BORROWER hereby authorizes and
empowers LENDER to supply and complete the necessary
information as a ministerial task consistent with the
understanding between the parties.
Upon any transfer of this Note, the LENDER may deliver
the property held as security, or any part thereof, to the
transferee, as well as any subsequent holder hereof, who
shall thereupon become vested with all the powers and
rights herein given to the LENDER in respect to the
property so transferred and delivered; and the LENDER shall
thereafter be forever relieved and fully discharged from
any liability or responsibility with respect to such
property so transferred but with respect to any property
not so transferred, the LENDER shall retain all rights and
powers hereby given.
WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, XXXXXXXX
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES,
THAT:
(A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR,
HEIR, OR LEGAL REPRESENTATION OF ANY OF THE SAME SHALL SEEK
A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR
ANY OTHER LITIGATION PROCEDURE ARISING FROM OR BASED UPON
THIS PROMISSORY NOTE, ANY OTHER LOAN AGREEMENT OR ANY LOAN
DOCUMENT EVIDENCING, SECURING OR RELATING TO THE
OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR
AMONG THE PARTIES THERETO;
(B) NEITHER THE BORROWER NOR XXXXXX WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT
BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES HERETO, AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS;
(D) NEITHER THE BORROWER NOR XXXXXX HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
TO ENTER INTO THIS TRANSACTION.
EVENTS OF DEFAULT. BORROWER shall be in Default
under this Note upon the happening of any of the following
events, circumstances or conditions, namely:
(1) Default in the payment or performance of any of the
OBLIGATIONS provided hereunder or in connection herewith or
any other OBLIGATIONS of BORROWER or any affiliate (as
defined in 11 U.S.C. 101(2), hereinafter affiliate) of
BORROWER or any endorser, guarantor or surety for BORROWER
to LENDER or any affiliate of LENDER, howsoever created,
primary or secondary, whether direct or indirect, absolute
or contingent, now or hereafter existing, due or to become
due, or of any other covenant, warranty or undertaking
expressed herein, therein, or in any other document
establishing said endorsement, guaranty, or surety; or any
other document executed by XXXXXXXX in conjunction
herewith; or
(2) Any warranty, representation or statement made or
furnished to LENDER by or on behalf of BORROWER, or any
guarantor, endorser, or surety for BORROWER in connection
with this Note or to induce LENDER to make a loan to
BORROWER which was false in any material respect when made
or furnished or has become materially false, if such
warranty of BORROWER or guarantor, endorser or surety for
BORROWER was ongoing in nature; or
(3) Death, dissolution, liquidation, termination of
existence, insolvency, business failure, appointment of a
receiver, custodian, or trustee for any part of the
property of, assignment for the benefit of creditors by, or
the commencement of any proceeding under any bankruptcy or
insolvency laws by or against BORROWER or any endorser,
guarantor, or surety for BORROWER; or
(4) BORROWER or any guarantor, endorser, or surety for
BORROWER shall allow the acquisition of substantially all
of the business or assets of BORROWER or guarantor,
endorser, or surety for BORROWER or a material portion of
such business or assets if such a sale is outside
BORROWER'S or guarantor's, endorser's or surety's ordinary
course of business, or more than 50% of the outstanding
stock or voting power of any other entity, or enter into
any transaction of merger or consolidation without prior
written consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser,
guarantor, or surety for said BORROWER to maintain its
corporate existence in good standing; or
(6) Upon the entry of any monetary judgment or the
assessment and/or filing of any tax lien against BORROWER
or any endorser, surety, or guarantor, or upon the issuance
of any writ of garnishment, judicial seizure of, or
attachment against any property of, debts due or rights of
BORROWER or any endorser, surety or guarantor, to
specifically include commencement of any action or
proceeding to seize monies of BORROWER or any endorser,
surety or guarantor on deposit in any bank account with
LENDER; or
(7) The BORROWER or any endorser, guarantor, or surety
for said BORROWER shall be a debtor, either voluntarily,
under (and as the term debtor is defined in) the United
States Bankruptcy Code or should the BORROWER be generally
not paying XXXXXXXX'S debts as such debts become due; or
(8) Failure of BORROWER, endorsers, guarantors or
sureties to furnish financial statements or other financial
information reasonably requested by XXXXXX; or
(9) Loss, theft, substantial damage, destruction, sale
or encumbrance to or of any COLLATERAL, or the assertion or
making of any foreclosure, levy, seizure, mechanic's or
materialman's lien or attachment thereof or thereon; or
(10) If LENDER should otherwise deem itself or the debt
created hereunder unsafe or insecure; or should LENDER, in
good faith, believe that the prospect of payment or other
performance is impaired.
THE FOREGOING ENUMERATION OF EVENTS OF DEFAULT
NOTWITHSTANDING, NOTHING HEREIN SHALL BE DEEMED TO LIMIT,
RESTRICT, IMPAIR OR DIMINISH THE ABSOLUTE RIGHT OF THE
LENDER TO DEMAND PAYMENT OF THE NOTE IN FULL, AT ANY TIME,
WITHOUT CAUSE.
No waivers, amendments or modifications shall be valid
unless in writing. No waiver by LENDER of any Default(s)
shall operate as a waiver of any other default or the same
default on a future occasion. All rights of LENDER
hereunder shall inure to the benefit of its successors and
assigns; and all obligations of BORROWER shall bind his
heirs, executors, administrators, successors and/or
assigns.
If more than one person has signed this instrument, such
parties are jointly and severally obligated hereunder.
Further, use of the masculine pronoun herein shall include
the feminine and neuter and also the plural. If any
provision of this instrument shall be prohibited or invalid
under applicable law, such provision shall be ineffective
but only to the extent of such prohibition of invalidity,
without invalidation the remainder of such provision or the
remaining provisions of this Note. In the case of conflict
between the terms of this Note and any Loan Agreement
and/or Letter of Intent issued in connection herewith, the
priority of controlling terms shall be first this Note,
then the Loan Agreement, then the Letter of Intent.
IN WITNESS WHEREOF, the BORROWER, on the day and year
first written above, has caused this Note to be executed
under seal by (i) if a corporation, adoption of the
facsimile seal printed hereon for such special occasion and
purpose (or if an impression seal appears hereon by
affixing such impression seal) by its duly authorized
officer(s), or (ii) if by individuals, by hereunto setting
their hands and seals.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Its: President
Taxpayer Identification Number 00-0000000
