Exhibit 10(u)
Kiddie Academy International, Inc. Sparks State Bank
000 Xxxxx Xxxx 00000 Xxxx Xxxx
Xxxxx 000 Xxxxxx, Xxxxxxxx 00000
Xxx Xxx, Xxxxxxxx 00000-8908 Line of Credit No.__________
XXXXXXXX'S NAME AND ADDRESS XXXXXX'S NAME AND ADDRESS Date: July 26, 1996
"I" includes each borrower above, "You" means the lender, Max. Credit Amt. $500,000.00
jointly and severally. its successors and assign. Loan Ref. No.
You have extended to me a line of credit in the AMOUNT of Five Hundred Thousand
and 00/100 $500,000.00.
You will make loans to me from time to time until 12:00 PM on July 26, 1997 .
Although the line of credit expires on that date. I will remain obligated to
perform all my duties under this agreement so long as I owe you any money
advanced according to the terms of this agreement, as evidenced by any note or
notes I have signed promising to repay these amounts.
This line of credit is an agreement between you and me. It is not
intended that any third party receive any benefit from this agreement, whether
by direct payment, reliance for future payment or in any other manner. This
agreement is not a letter of credit.
1. AMOUNT: This line of credit is:
[ ] OBLIGATORY: You may not refuse to make a loan to me under this
line of credit unless one of the following occurs:
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my
indebtedness under this line of credit;
d. I have violated any term of this line of credit or any note or
other agreement entered into in connection with this line of
credit;
e. __________________________________________________________ .
[X] DISCRETIONARY: You may refuse to make a loan to me under this line
of credit once the aggregate outstanding advances equal or exceed
Zero $.00.
Subject to the obligatory or discretionary limitations above, this line
of credit is:
[X] OPEN-END (Business or Agricultural only): I may borrow up to the
maximum amount of principal more than one time.
[ ] CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line
of credit agreement as set out in the promissory note, I signed on July
26, 1996 , or any note(s) I sign at a later time which represent
advances under this agreement. The note(s) set(s) out the terms
relating to maturity, interest rate, repayment and advances. If
indicated on the promissory note, the advances will be made as follows:
In Person, In Writing or by Telephone
3. RELATED DOCUMENTS: I have signed the following documents in connection
with this line of credit and note(s) entered into in accordance with
this line of credit:
[X] security agreement dated July 26, 1996 [ ]
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[ ] mortgage dated [ ]
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[ ] guaranty dated [ ]
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4. REMEDIES: If I am in default on the note(s) you may:
a. take any action as provided in the related documents;
b. without notice to me, terminate this line of credit.
By selecting any of these remedies you do not give up your right
to later use any other remedy. Be deciding not to use any remedy should
I default, you do not waive your right to later consider the event a
default, if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I
will pay your reasonable attorney's fees, where permitted by law. I
will also pay your court costs and costs of collection, where permitted
by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe
you money for advances made in accordance with the line of credit, I
will do the following:
a. maintain books and records of my operations relating to the need
for this line of credit;
b. permit you or any of your representatives to inspect and/or copy
these records; c. provide to you any documentation requested to
you which support the reason for making any advance under this line
of credit;
d. permit you to make any advance payable to the seller (or seller and
me) of any items being purchased with that advance;
e. __________________________________________________________________.
7. NOTICES: All notices or other correspondence with me should be sent to
my address stated above. The notice or correspondence shall be
effective when deposited in the mail, first class, or delivered to me
in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a
written agreement signed by you and me. The law of the state in which
you are located will govern this agreement. Any term of this agreement
which is contrary to applicable law will not be effective, unless the
law permit you and me to agree to such a variation.
FOR THE LENDER Sparks State Bank SIGNATURES: I AGREE TO THE TERMS OF
THIS LINE OF CREDIT. I HAVE RECEIVED
A COPY ON TODAY'S DATE.
/s/ Xxxx X. Xxxxxxxxxx Kiddie Academy International, Inc.
-------------------------------------- --------------------------------------
Title: Assistant Vice President /s/ Xxxxxx Xxxxxx
-------------------------------------- --------------------------------------
Xxxxxx Xxxxxx, CEO
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx, President
Kiddie Academy International, Inc. Sparks State Bank
000 Xxxxx Xxxx, Xxxxx 000 00000 Xxxx Xxxx Loan Number________
Bel Air, Maryland 21015-8908 Sparks, Maryland 21152 Date July 26, 1996
XXXXXXXX'S NAME AND ADDRESS XXXXXX'S NAME AND ADDRESS Maturity Date July 26, 1997
"I" includes each borrower above, "You" means the lender, Loan Amount $500,000.00
jointly and severally. its successors and assign. Renewal of
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of Five Hundred Thousand and 00/100 Dollars
$500,000.00.
[ ] Single Advance: I will receive all of this principal sum on. No additional
advances are contemplated under this note.
[X] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On July 26, 1996
I will receive the amount of $.00 and future principal advances are
contemplated.
Conditions: The conditions for future advances are As stated in the Line
of Credit Agreement dated July 26, 1996.
[X] Open End Credit: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to all
other conditions and expires on July 26, 1997.
[ ] Closed End Credit: You and I agree that I may borrow up to the
maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
July 26, 1996 at the rate of 6.95% per year until July 26, 1997 or
the loan is paid in full, whichever comes first.
[ ] Variable Rate: This rate may then change as stated below.
[ ] Index Rate: The future rate will be
the following index rate:
[ ] Frequency and Timing: The rate on this note may change as often as
. A change in the interest rate will take effect .
[ ] Limitations: During the term of this loan, the applicable annual
interest rate will not be more than % or less than %.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change. [ ] The amount of
the final payment will change.
[ ] ___________________________________________________________________.
ACCRUAL METHOD: Interest will be calculated on a 365 day basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[X] on the same fixed or variable rate basis in effect before maturity
(as indicated above).
[ ] at a rate equal to ________________________________________________.
[X] LATE CHARGE: If a payment is made more than 15 days after it is due, I
agree to pay a late charge of $2.00 or 5% of any late payment whichever is
greater .
[ ] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [ ] are not included in the principal amount
above: ________________________________________________________________.
PAYMENTS: I agree to pay this note as follows:
[X] Interest: I agree to pay accrued interest Monthly as billed
[X] Principal: I agree to pay the principal As stated in the Line of Credit
Agreement dated July 26, 1996 .
[ ] Installments: I agree to pay this note in _______ payments. The first
payment will be in the amount of $ __________ and will be due ____________.
A payment of $_________ will be due _____________ thereafter. The final
payment of the entire unpaid balance of principal and interest will be
due ________________.
[ ] Unpaid Interest: If checked, any accrued interest not paid when due
(whether due by reason of a schedule of payments or due because of
Xxxxxx's demand) will become part of the principal thereafter, and will
bear interest at the interest rate in effect from time to time as provided
for in this agreement.
[X] STATUTORY AUTHORITY: This loan is made under Subtitle 9 of Title 12 of the
Commercial Law Article of the Annotated Code of Maryland .
ADDITIONAL TERMS: The Line of Credit is secured by a 12 month Certificate of
Deposit #300911 opened at Sparks State Bank in the amount of $500,000.00
[X] CONFESSION OF JUDGMENT: If checked, SIGNATURES: I AGREE TO THE TERMS
to the paragraph on page 2 confessing OF THIS NOTE
judgment. (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's
date.
PURPOSE: The purpose of this loan is Kiddie Academy International, Inc.
Business: Cash Flow
------------------------------- /s/ Xxxxxx Xxxxxx
Signature for Xxxxxx Xxxxxx State Bank ----------------------------
/s/ Xxxx X. Xxxxxxxxxx Xxxxxx Xxxxxx, CEO
---------------------------------------- /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
APPLICABLE LAW: The law of the state of Maryland will govern this note. Any term
of this note which is contrary to applicable law will not be effective, unless
the law permits you and me to agree to such a variation. If any provision of
this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder
of each payment will then reduce accrued unpaid interest, and then unpaid
principal. If you and I agree to a different application of payments, we
will describe our agreement on this note. I may prepay a part of, or the
entire balance of this loan without penalty, unless we specify to the contrary
on this note. Any partial prepayment will not excuse or reduce any later
scheduled payment until this note is paid in full (unless, when I make the
prepayment, you and I agree in writing to the contrary).
INTEREST: If I receive the principal in more than one advance, each advance
will start to earn interest only when I receive the advance. The interest
rate in effect on this note at any given time will apply to the entire principal
advance at that time. You and I may provide in this agreement for accrued
interest not paid when due to be added to principal. Notwithstanding anything to
the contrary, I do not agree to pay and you do not intend to charge any rate of
interest that is higher than the maximum rate of interest agreed to here
(either before or after maturity). If any notice of interest accrual is
sent and is in error, we mutually agree to correct it, and if you actually
collect more interest than allowed by law and this agreement, you agree to
refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the
rate on this note will be the same rate you charge on any other loans or class
of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of
this note. For the purpose of interest calculation, the accrual method will
determine the number of days in a "year". If no accrual method is stated, then
you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY
LENDER" paragraph below, or if we have agreed that accrued interest not paid
when due may be added to principal.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat
those payments made by you as advances and add them to the unpaid principal
under this note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you. "Right to receive
money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession
for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at the
time you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of your
right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the
terms of any separate instrument creating the security interest and, to the
extent not prohibited by law and not contrary to the terms of the separate
security instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1)
I fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on
any debt or agreement I have with you; (4) any other creditor of mine attempts
to collect any debt I owe him through court proceedings; (5) I die, am
declared incompetent, make an assignment for the benefit of creditors, or
become insolvent (either because my liabilities exceed my assets or I am unable
to pay my debts as they become due; (6) I make any written statement or
provide any financial information that is untrue or inaccurate at the time it
was provided; (7) Any collateral securing this note is used in a manner or for a
purpose which threatens confiscation by a legal authority; (8) I change my
name or assume an additional name without first notifying you before making
such a change; (9) I fail to plant, cultivate and harvest crops in due season;
(10) any loan proceeds are used for a purpose that will contribute to
excessive erosion of highly erodible land or to the conversion of wetlands
to produce an agricultural commodity, as further explained in 7 C.F.R. Part
1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and accrued unpaid charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-Off" paragraph herein.
(3) You may demand security, additional security, or additional parties to
be obligated to pay this note as a condition for not using any other
remedy.
(4) You may refuse to make advances to me or allow purchases on credit by
me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your
right to later use any other remedy. By waiving your right to declare an
event to be a default, you do not waive your right to later consider the event
as a default if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any fee you
incur with such attorney plus court costs (except where prohibited by law). To
the extent permitted by the United States Bankruptcy Code, I also agree to
pay the reasonable attorney's fees and costs you incur to collect this debt as
awarded by any court exercising jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in full.) I
agree that you may at your option extend this note or the debt represented by
this note, or any portion of the note or debt, from time to time without limit
or notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your prior
written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to
report to others your credit experience with me (such as a credit reporting
agency). I agree to provide you, upon request, any financial statement or
information you may deem necessary. I warrant that the financial statements
and information I provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
CONFESSION OF JUDGMENT: If checked on page 1, I authorize any attorney to
appear in a court of record and confess judgment, without process, against
me, in favor of you, for any amounts owed under this note, together with
collection costs including reasonable attorney's fees.
