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EXHIBIT 6(i)
COMMERCIAL LOAN
AND SERVICING AGREEMENT
(SECURED LINE OF CREDIT)
This Agreement is made as of December 22, 1998, between:
First National of North America, LLC
a Michigan Limited Liability Company
000 X. Xxxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxx Xxxxxxx, Xxxxxxxx 00000 ("LENDER")
and
Austin Funding Corporation
000 Xxxxxxxx #000
Xxxxxx, XX 00000 ("BORROWER")
and
Xxxxx X. XxXxxxxx
00000 Xxxxxxxxxx Xx. #000
Xxxxxx, XX 00000 ("GUARANTOR")
Xxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxxxxx Xxxx, #000
Xxxxxx, XX 00000 ("GUARANTOR")
Lender agrees to loan to Borrower up to the amount of Five Hundred
Thousand Dollars ($500,000) on a revolving line of credit basis, which
Borrower agrees to repay with interest and other fees and expenses, all on
the following terms and conditions ("Loan"):
1. Purpose of Loan. The purpose of the Loan is to provide working
capital to Borrower for its purchase of real estate notes (collectively
referred to as the "Notes" and individually as the "Note"). The proceeds of
the Loan shall be used only for this purpose. It is anticipated that
Borrower will be engaging in two (2) types of purchases: a "Whole Purchase"
whereby Borrower purchases all remaining payments due on the Note at the
time of purchase and a "Partial Purchase" whereby Borrower purchases less
than all remaining payments due on the Note at the time of purchase. The
undersigned hereby swears that the proceeds of the loan will only be used
for the business purposes set forth in this paragraph.
2. Term of Loan. The term of the Loan is for the period commencing this
date through January 1, 2000. Borrower agrees to repay all accrued interest
and other fees and expenses, if any, due Lender under the terms and
conditions of this Agreement by that date. Prepayment of any amount or all
of the principal may be made without penalty. Notwithstanding the preceding
provisions of this paragraph to the contrary, Lender reserves the right, at
any time, for any reason, in its sole discretion, to terminate this
Agreement and demand full payment of all principal, interest and other fees
and expenses due Lender under this Agreement and Borrower agrees to pay
these amounts in full on demand, subject to the provisions of paragraph 13.
3. Rate and Accrual of Interest. Interest shall accrue and be based on
the weighted average daily borrowings made by Borrower against the line of
credit at the weighted average per annum rate of interest determined by
assigning from attached Schedule A the appropriate interest rate to each
Note in the Collateral Base, but in no case more than the maximum per annum
rate of interest lawfully chargeable by Lender to Borrower under the laws of
Michigan. The weighted average interest rate shall be determined by
weighting each note's interest rate as assigned on Schedule A by such note's
equivalent balance. For purposes of this paragraph, Borrower will be deemed
to have borrowed each amount deposited by Lender in the checking account
described in paragraph 9, as of the date of deposit of such amount to the
checking account by Lender. If there is no Note in the Collateral Base from
which to calculate a weighted average per annum rate of interest, then the
rate shall be equal to the AAA rate from Schedule A hereto.
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4. Default Rate of Interest. If default in any term or condition of the
Loan exists for more than thirty (30) days, the per annum rate of interest
for the period of default shall be the interest rate determined under the
provisions of paragraph 3, plus two percentage points (2.0%) but in no case
more than the maximum per annum rate of interest lawfully chargeable by
Lender to Borrower under the laws of Michigan.
5. Payment of Interest and Fees. Interest shall be paid monthly, in
arrears, beginning January 1, 1999, and on the same day of each month
thereafter during the term of the Loan. The interest, as well as other fees
and expenses, it any, due from Borrower, shall be paid from the Payment
Account (as defined in paragraph 11). If the amounts in the Payment Account
at any time are insufficient to pay the interest (or any other amount which
is to be paid from Payment Account as described in paragraph 11), Borrower
shall pay the amounts due within three (3) business days of receipt of
written notice from Lender. Any amount not paid when due shall be added to
and become a part of the principal balance of the Loan, itself to accrue
interest at the rate stated above until paid. Nothing in the preceding
sentence shall be construed as a waiver of Borrower's obligation to
immediately pay any delinquent amount.
6. Notes as Security. As security for Borrower's performance under this
Agreement, Borrower will deposit Notes with Lender in such quantity as
Borrower chooses from time to time. Such Notes will be cared for and
safeguarded with the same care that Lender extends to its own Notes,
including the use of fire-proof files for storage, etc. Borrower shall
submit with the deposit of each Note such information as Lender may require
to permit Lender to adequately evaluate the strength of the Note as security
for the Loan. Lender is under no obligation to accept any Note, at all times
reserving the right, for whatever reason determined by Lender in its
discretion, to reject a Note as inadequate security. However, once a Note
has been accepted, it will not subsequently be rejected unless it becomes
delinquent. Some, although not all, of the criteria used by Lender in making
its determination will be:
A. The Note must be a first lien obligation of the buyer of an
interest in real estate.
B. The Note must not be secured by property actually or
potentially contaminated by hazardous waste materials.
Borrower agrees to and hereby does indemnify and hold Lender harmless from
any and all liabilities (including but not limited to any environmental,
hazard or regulatory concerns, statutes, regulations, laws, litigation,
mediations or other adjudications) of any type arising out of the Lender
holding an interest in any Note.
7. Limitation on Amount of Outstanding Principal. Subject to the Five
Hundred Thousand Dollar ($500,000) limitation stated above, at no time shall
the amount of principal borrowed by Borrower and unpaid under the Loan
exceed the weighted average Advance Rate as a percentage of the Unpaid
Principal Balance of the Notes on deposit with Lender as provided in
paragraph 6 (the "Loan Ratio"). The Advance Rate for any given Note shall be
determined as shown on Schedule A. Provided, however, that in no case will a
note be eligible for an advance in excess of the amount that would amortize
through the monthly principal and interest payments on the Note without
giving effect to any balloon. The weighted average Advance Rate shall be
calculated by revising, where applicable, the then applicable maximum
Advance Rate from Schedule A to any applicable percentages or any applicable
amount as listed in Paragraph 7(A), 7(B), 7(C), 7(D) of this agreement, and
then calculating a weighted average advance rate by dividing (a) the Sum of
all Advance Rates multiplied by the Unpaid Principal Balance applicable to
such Advance Rate by (b) the Sum of all Unpaid Principal Balances. The
following will be considered in calculating the Loan Ratio:
In the case of all notes:
A. any Note which Lender has accepted which is 150 days or more
delinquent will not be included in the Loan Ratio
calculation;
B. that part of the Unpaid Principal Balance of any Note in
excess of $75,000 will not be included in the Loan Ratio
calculation;
C. only 40% of the Unpaid Principal Balance of any Note more
than 90 but less than 150 days or more delinquent will be
included in the Loan Ratio calculation provided, however,
that if Lender is not reasonably assured that collection
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efforts are being made and that the original balance due on
the Note is recoverable through collection efforts or
foreclosure 0% of the Unpaid Principal Balance of such Note
shall be included in the Loan Ratio calculation;
D. only 70% on any note originated by Borrower with less than
six months seasoning, and 75% on notes originated by
Borrower with more than six months of seasoning;
E. no more than 20% of line in vacant subdivision paper; and
F. no more than 25% of line in non-residential paper. For
purposes of this requirement residential paper includes
owner occupied, rental or vacant property as long as it is
being or is intended for use as residential as opposed to
commercial property.
For purposes of this paragraph the term "Unpaid Principal Balance" means
the actual unpaid principal balance of a Whole Purchase Note and the
Equivalent Balance for a Partial Purchase Note. The term "Equivalent
Balance" means the calculated loan amount which would amortize over the
number of months remaining on the portion of the Note purchased at the
interest rate and monthly payment stated in the Note without regard to
balloon payments.
8. Retention and Return of Notes. As to each Note rejected by Lender,
Lender shall return to Borrower at Borrower's request the Note and all
documents and other information provided by Borrower in furtherance of
Lender's review of the Note. As to each Note accepted by Lender, the Note
and the documents and other information provided by Borrower shall remain
in Lender's possession, until:
A. the Note is paid -
at which time Lender is authorized to xxxx any Note in its
possession "PAID" on behalf of Borrower and deliver it to
the Note obligor or the Escrow Agent (as defined in
paragraph 10.1 below), and return to Borrower or the Escrow
Agent all of the documents and other information provided by
Borrower to Lender concerning the Note; or
B. Borrower requests, in writing, that the Note be redelivered
to Borrower, and Lender consents, in writing, to the
redelivery-
at which time Lender shall return to Borrower the Note and
all of the documents and other information provided by
Borrower to Lender concerning the Note, PROVIDED, however,
that Lender is not obligated to redeliver the Note if
redelivery will cause the unpaid principal balance on the
Loan to exceed the Loan Ratio; or
C. all moneys owed Lender by Borrower are paid in full-
at which time the Notes and the other documents and
information relating to the Notes shall be returned by
Lender to Borrower.
Once a Note has been returned to Borrower it shall not be taken into
consideration for purposes of determining the Loan Ratio. All Notes
returned by Lender which have been endorsed or assigned to the order of
Lender shall be re-endorsed or reassigned by Lender to the order
of Borrower.
9. Funding of Line of Credit. Lender will establish a commercial
checking account in Borrower's name, to which all advances on the line of
credit will be deposited by Lender ("Deposit Account"). Deposits to the
Deposit Account will be made at the time and in the amount requested by
Borrower provided the request meets all of the requirements of this
Agreement. Same day fundings for not to exceed 5 files in any one day for
Borrower will be made on any day in which nationally chartered banks are
open for business, upon request of Borrower, if the request is received by
11:00 a.m. Eastern time provided that either: (1) there are funds available
from Borrower's existing Loan Ratio or (2) the necessary documents have
been received by the Lender for adding, to the Loan Ratio calculations the
additional Collateral for which funds are requested. The Lender shall be
obligated to make a deposit only if the requested advance meets the Loan
Ratio requirements
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and only if Borrower is not in default under this Agreement. Borrower is
entitled, by check, to draw against the Deposit Account at an time. However,
withdrawals of moneys representing advances on the line of credit shall be
used only for Borrower's business purposes as stated in paragraph 1. Should
Borrower at any time be in default on any obligation to Lender which
requires the payment of money by Borrower to Lender, Lender may offset
moneys in the Deposit Account against such obligations. Borrower shall be
notified in writing of any offset but hereby waives the right to any such
notification.
10. Servicing of Notes Held By the Lender. Certain Notes accepted by
Lender will be serviced by Lender or other party designated by Lender
("Servicing Agent"). These Notes will be serviced on the following terms and
conditions:
A. Servicing Agent shall notify each obligor, in writing, that
the Note is being serviced by Servicing Agent, and provide
the Note obligor with the address to which payments are to be
made.
B. Servicing Agent will establish and maintain an account for
the receipt of the Note payments.
C. Borrower will pay Servicing Agent a fee of $6 per payment
received on each Note to be paid on the first day of each
month for payments received during the preceding month.
D. If requested to do so, Servicing Agent will provide Borrower
with daily servicing reports on all Notes held by Lender.
E. Servicing Agent shall not be obligated to undertake any
collection efforts to collect any payments on any Note and
shall, upon request of Borrower, return the Note to Borrower
together with records and information maintained by Servicing
Agent relating to the servicing of the Note subject to
paragraph 7 above.
F. Servicing Agent shall use its customary efforts in servicing
(but not in collecting payments upon) the Notes. As used in
the preceding sentence, the term "customary efforts" means,
the efforts customarily employed by Servicing Agent in its
normal course of business in servicing notes which it owns,
or notes which it does not own but are being serviced for
another, but does not include any collections, letters, phone
calls, or any obligation to commence any collection efforts
or litigation or pursue any security given by the Note
obligor for the Note.
G. Borrower warrants the property taxes and insurance are
current at all times for property placed in the collateral
pool. Lender is not responsible for monitoring or enforcing
property tax status or insurance coverage.
H. Borrower agrees to repay all expenses incurred by Lender on
Borrower's behalf in regard to servicing of Notes or in
regard to putting Notes on or taking Notes off the Revolving
line including but not limited to legal fees, NSF charges,
forced place insurance charges, wiring fees, and overnight
mail charges.
1. Borrower will execute and record in the appropriate real
estate records a Collateral Assignment for each Note to
Lender on a form acceptable to Lender. (A copy of this
Collateral Assignment will be forwarded by Borrower to Lender
and Lender shall be entitled to retain the original
Collateral Assignment in its files to be released upon
payment in full of the Note.)
Borrower will execute, when requested by Servicing Agent, a notice to each
Note obligor that the Note is being serviced by Servicing Agent, with
instructions to the obligor concerning future payments and an instruction
that no further payments are
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to be made to Borrower without the prior written consent of Lender. Lender
agrees to give that written consent as to any Note redelivered to Borrower.
If Borrower is in default under this Agreement and Lender, while Borrower is
in default, services any Note 90 days or more delinquent, Borrower shall
reimburse Lender for all of Lender's costs and expenses incurred in
servicing the Note during the period of Borrower's default. The costs and
expenses include, but are in no manner limited to actual legal fees and
court costs. These costs and expenses will be immediately due from Borrower
to Lender when paid by Lender. Nothing in this paragraph will be deemed to
obligate Lender to make active collection efforts with regard to any Note.
10.1 Servicing of Notes Held by Escrow Agent. Notes accepted by Lender
that are not serviced in accordance With paragraph 10 above will be serviced
by State-approved and licensed escrow companies, banks or title companies
(the "Escrow Agent"). These Notes will be serviced on the following terms
and conditions:
A. Borrower will provide a Letter of Instruction to Escrow Agent
in a form acceptable to Lender instructing Escrow Agent to
direct all future payments due from the Note obligor to be
sent to Lender. (A copy of this letter Will be forwarded by
Borrower to Lender.)
B. Borrower will verify that Escrow Agent has in its possession
all necessary original documents pertaining to each Note and
that they are both complete and accurate.
C. Borrower will execute and record in the appropriate real
estate records a Collateral Assignment for each Note to Lender
in a form acceptable to Lender. (A copy of this Collateral
Assignment will be forwarded by Borrower to Escrow Agent.)
Lender Will retain the original Collateral Assignment in its
files to be released to Escrow Agent upon payment in full of
any Note.
D. Borrower will pay Servicing Agent (Lender) a fee of $6 per
payment received on each Note (regardless of whether the Note
is used to determine the Loan Ratio), to be paid on the first
day of each month for payments received during the preceding
month.
E. If requested to do so, every two weeks Servicing Agent
(Lender) will provide Borrower with servicing reports on all
Notes held by Lender.
F. Borrower warrants the property taxes and insurance are current
at all times for property placed in the collateral pool.
Lender is not responsible for monitoring or enforcing property
tax status or insurance coverage.
G. Borrower agrees to repay all expenses incurred by Lender on
Borrower's behalf in regard to servicing of Notes or in regard
to putting Notes on or taking Notes off the revolving line
including but not limited to legal fees, NSF charges, forced
place insurance charges, wiring fees, and overnight mail
charges.
Borrower will execute, if requested by Escrow Agent, a notice to each Note
obligor that the Note is being serviced by Escrow Agent, with instructions
to the obligor concerning future payments and an instruction that no further
payments are to be made to Borrower without the prior written consent of
Lender. Lender agrees to give that written consent as to any Note
redelivered to Borrower. If Borrower is in default under this Agreement and
Lender, while Borrower is in default, begins collection efforts or otherwise
services any Note 90 days or more delinquent, Borrower shall reimburse
Lender for all of Lender's costs and expenses incurred in servicing the Note
during the period of Borrower's default. The costs and expenses include, but
are in no manner limited to, actual legal fees and court costs. These costs
and expenses will be immediately due from Borrower to Lender when paid by
Lender. Nothing in this paragraph will be deemed to obligate Lender to make
active collection efforts with regard to any Note.
11. Payments from the Notes. All payments received by Lender on the
Notes will be accounted for, as received, and deposited by Lender in an
account established by Lender ("Payment Account"). On the first business day
of
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each month the moneys in the Payment Account shall be used to pay the
following items in the order stated for the preceding month: servicing fees
under paragraph 10 or 10.1, fees owed by Borrower to Lender under paragraph
20, interest on the Loan and any other fees or expenses, if any, owed by
Borrower to Lender under this Agreement or any other agreement between the
parties. If not required to maintain the Loan Ratio, the balance of the
moneys in the Payment Account will be deposited by Lender in the Deposit
Account, to be used as provided for in paragraph 9.
12. Default. Any failure of Borrower to pay any interest, principal, or
fee when due; any breach or default of any term, condition or warranty of
this Agreement or any other agreement between Borrower and Lender; any
appointment of a receiver, trustee, or assignment for the benefit of
creditors; any voluntary or involuntary insolvency proceeding; any
assessment for taxes (other than real property taxes) levied by any
government entity; or any lien, attachment, or garnishment by a creditor of
Borrower shall constitute a default hereof, and Lender may, at its sole and
absolute option, declare all sums due from Borrower immediately due and
payable regardless of the terms of any evidence of indebtedness between
Borrower and Lender. Nothing in this paragraph will be deemed to impair the
demand nature of the Loan.
13. Termination of Line of Credit. If the Loan is terminated or not
renewed by Lender, for any reason other than Borrower's default, Borrower
shall be entitled to pay the then-unpaid portion of the Loan in
installments, amortized over 30 months. The initial rate of interest shall
be that specified in paragraph 3 with an interest rate redetermination made
each three (3) months thereafter at the prime rate of interest as published
in the Wall Street Journal (or other comparable index selected by Lender if
the Wall Street Journal ceases publication of its prime rate of interest)
plus 3.75% provided, however, that such rate shall not be less than twelve
percent (12%) per annum nor more than the maximum per annum rate of
interest lawfully chargeable by Lender to Borrower under the laws of
Michigan. At the date of redetermination, the monthly payment will be
adjusted for the three (3) month period to reflect this change in the
interest rate. All amounts unpaid under this Agreement shall be paid in full
at the conclusion of the 36 month period. The monthly payments of principal
and interest shall be paid from the Payment Account. If the amounts in the
Payment Account at any time are insufficient, Borrower shall pay the amount
of insufficiency within three (3) business days of receipt of written
notice from Lender. At any time during the first seven months of the
original Term of this Agreement, Borrower may choose to terminate this
agreement and receive a refund of all origination points. If Borrower
terminates this agreement during the first seven months, Borrower must pay
the entire outstanding balance (including all principal and accrued
interest, together with any other fees and expenses then owing to Lender)
within such seven month period and then Lender will refund the entire of the
principal portion of the origination fees and cancel this Agreement.
14. Additional Security. As additional security, repayment of all
moneys due under this Agreement will be personally guaranteed by Xxxxx X.
XxXxxxxx ("Guarantor") and Xxxxx X. Xxxxxxxx ("Guarantor"). The form of the
guaranty will be that specified by Lender's attorneys.
15. Financial Statements. Both at the time of origination and by May 15
of each year (for the Borrower's year ending the previous December 31) while
this Agreement is in effect, Borrower shall submit to Lender a profit and
loss statement and balance sheet of Borrower for the prior calendar year,
as well as the balance sheet of Guarantor for the same period. The financial
statements need not be audited or CPA prepared, but must be signed by
Borrower and Guarantor, respectively, and certified by them to be accurate.
Borrower shall also supply for Lender such interim and additional financial
statements or reports as Lender shall from time to time request.
16. Documentation of Loan. The Loan shall be evidenced by this
Agreement and such other documents as Lender and its lawyers determine
necessary and appropriate. Borrower agrees to execute and deliver such
documents as a condition of and at the time of the establishment of the line
of credit and at other times during the term of the Loan as determined by
Lender.
17. Renewals. If this Loan is renewed by mutual agreement of the
parties hereto Borrower will be required to execute such documents as
required by Lender, and pay points equal to one percent (1%) of the maximum
amount that may be advanced under the credit line as renewed.
18. Endorsement or Assignment of Notes. Borrower will endorse or assign
each Note in an endorsement form to the reasonable satisfaction of Lender.
Borrower also hereby grants Lender a power of attorney to endorse all Notes
to Lender in the event Borrower fails to endorse such Notes.
19. Cross-Collateralization and Default. All collateral security given
to secure the Loan shall also secure all of
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the other obligations of Borrower to Lender of whatsoever nature, past,
present, or future. All collateral security given for other obligations of
Borrower to Lender, together with any debt from Lender to Borrower,
(including, but not limited to checking, deposit accounts, certificates of
deposit, savings accounts, and the like) shall, likewise, secure the Loan.
It is the expressed intent to cross-collateralize all of the borrowings or
other indebtedness of Borrower to Lender. The breach of the terms of any
note, security agreement, mortgage, pledge, or loan agreement of whatsoever
nature between Borrower and Lender shall constitute a default and breach of
all such agreements, including this Agreement.
20. Set-Up Fee and Points. Borrower shall pay an initial set-up fee of
$100 when a Note is added to the Collateral Base and an additional release
fee of $100 when a Note is removed from the Collateral Base. This fee shall
be paid on the first business day of each month for Notes accepted in the
prior month. Additionally, origination points of 2% ($10,000) is owed by
Borrower from the time of executing this Agreement, the payment of which
may be in cash or may, at Borrower's option be added to the indebtedness on
the line of credit. If the origination points are added to the indebtedness,
such amount shall not initially be included as indebtedness for purposes of
the borrowing base calculation but shall in such case be added together with
any interest thereon to the indebtedness for borrowing base purposes on a
per diem basis beginning 30 days after the date of execution of this
agreement. Such fees shall be secured by all collateral delivered to Lender
even if not included in the borrowing base calculation. Increases in the
existing line of credit may be granted subject to conditions determined by
Lender and points equal to two percent (2%) of the amount of the increase
in the credit line. A standby fee of one quarter of one percent (.25%) per
annum of the difference between the maximum loan amount as stated in
paragraph one and the daily balance on the Loan during the prior month,
shall accrue on a daily basis (without compounding) beginning six (6)
months from the inception of this agreement or upon the first time that
borrowings on the line exceed $375,000, whichever comes sooner and shall
be paid by Borrower to Lender on the first business day of each month for
the prior month. Upon termination, should termination occur, the standby
fee accrued to that date shall be immediately paid. Provided, however, that
the unused fee shall be waived in its entirety for the entire original term
of this Agreement if at any point during such term, the Borrower has an
unpaid secured balance in excess of 80% of the original maximum principal
amount of this Agreement.
21. Right of First Refusal. Borrower is obligated to offer Lender the
right to purchase all or any part of any Note offered for sale by Borrower
to a third party. Lender has three (3) business days to respond to Borrower
after the terms of any written offer by a third party to Borrower has been
presented in writing to Lender.
22. Relationship Between the Parties. Borrower acknowledges that the
relationship between lender and borrower is the relationship of debtor and
creditor only. Lender is, and at all times will remain, an independent
lender. Lender, its officers, directors, partners, servants, employees,
assignees, and other representatives shall not, under any circumstances, be
deemed to be partners, venturers, co-owners, or promoters of borrower for
any purpose whatsoever unless other agreements establish such a
relationship. Nothing in this agreement shall establish the relationship of
a partnership, joint venture, or other form of business relationship in
which fiduciary duties with respect to participants in such an organization
or association could arise between lender and borrower.
23. Representations and Warranties of Borrower. Borrower represents and
warrants to Lender, now, and at all times during the term of this Agreement,
that:
A. All representations and statements of whatever nature made or
delivered to Lender at any time prior to, contemporaneous
with, or subsequent to this Agreement have been, are, or
shall be true in all respects.
B. Borrower is a C. corporation, in good standing in the State
of Texas and is properly authorized and licensed to do
business in every state in which it does business where
authorization or licensure is required as a condition of
doing business. As evidence of this fact, Borrower will
provide the Lender a certificate of good standing at
origination of this agreement. If a certificate is not
provided by Borrower at or before the time this Agreement is
executed, Lender may obtain the certificate and charge
Borrower a fee of $50 plus cost for the acquisition of the
certificate.
C. If the business activities of Borrower described in paragraph
1 of this Agreement require Borrower to be licensed, all
licenses have been obtained and are not
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subject, for any reason, to being revoked or suspended.
D. Borrower has full and unencumbered title to all property
relied upon by Lender as security and to all assets set forth
in any financial statement, unless otherwise indicated in such
statement.
E. Borrower will keep its books and records in accordance with
generally accepted accounting principles.
F. Borrower will maintain management personnel satisfactory to
Lender and will conduct its affairs in a manner consistent
with sound business practices as measured by the nature of
Borrower's business.
G. No indulgence or failure of Lender to enforce any rights under
this Agreement or under any other agreement between Borrower
and Lender shall constitute a waiver of those terms by Lender.
H. Borrower will promptly inform Lender of any fact or act which
materially affects Borrower's financial condition.
I. No provision, warranty or promise made by Borrower in any
document related to this transaction causes any conflict
whatsoever with the terms of any document related to any other
transaction Borrower may be involved with, with any other
person or entity.
J. The business of Borrower shall be continued in its present
form and at the address as shown on page one, and Borrower
will not enter into a consolidation, merger, or permit a
majority of its common stock to be transferred, or grant
options which could result in such actions unless Lender is
first notified and consents in writing to any such change.
24. Governing Law. This Agreement shall be construed under the laws of
Michigan.
25. Time of Essence. Time is of the essence in the performance of this
Agreement by Borrower.
26. Modifications of Agreement. This Agreement may be modified only in
writing.
27. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relative to the Loan.
28. Assignment. Borrower's rights and obligations under this Agreement
are not assignable or otherwise transferable. Lender may freely assign or
otherwise transfer this Agreement.
29. Tax Liens. Lender shall at no time be obligated to make an advance
on the Line of Credit to Borrower if a federal tax lien has been filed
against Borrower or Guarantor and Borrower and Guarantor agree to give
Lender immediate notice with respect to any federal or state tax lien filing
affecting the Borrower or Guarantor or any of the Property of Borrower or
Guarantor in any way.
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Lender:
FIRST NATIONAL OF NORTH AMERICA, LLC
a Michigan Limited Liability Company
By:
---------------------------------
Its
---------------------------------
Date:
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Borrower:
Austin Funding Corp.
a Texas corporation
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Its President
---------------------------------
Date: 12/29/98
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Guarantor:
/s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. XxXxxxxx
Date: 12/29/98
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Guarantor:
/s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxx
Date: 12/29/98
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