PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$150,000.00 10-10-1997 10-10-1998 501 0043 5887948 56211
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
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Borrower: Lender:
MEDI-HUT CO.,INC.,(TIN: 00-0000000) PNC BANK, NATIONAL ASSOCIATION
1935 SWARTHMORE AVENUE TWO TOWER CENTER BOULEVARD
LAKEWOOD, NJ 08701 EAST XXXXXXXXX, XX 00000
______________________________________________________________________________
Principal Amount: $150,000.00
Initial Rate: 11.500%
Date of Note: October 10, 1997
PROMISE TO PAY. MEDI-HUT CO., INC. ("Borrower") promises to pay PNC BANK,
NATIONAL ASSOCIATION ("Lender"), or order, in lawful money of the United
States of America, the principal amount of One Hundred Fifty Thousand & 00/100
Dollars ($150,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall
be calculated from the date of each advance until repayment of each advance.
Xxxxxxxx also promises to pay all applicable fees and expenses.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
Borrower will pay regular monthly payments of accrued interest beginning
NOVEMBER 10, 1997, and all subsequent interest payments are due on the
same day of each month after that. Borrower will pay this loan in one
payment of all outstanding principal plus accrued unpaid interest on the
Expiration Date. Borrower may borrow, repay and reborrow hereunder until
the Expiration Date, subject to the terms and conditions of this Note.
The "Expiration Date" shall mean OCTOBER 10, 1998, or such later date as
may be designated by written notice from Lender to Borrower. Borrower
acknowledges and agrees that in no event will Lender be under any
obligation to extend or renew the loan or this Note beyond the initial
Expiration Date. In no event shall the aggregate unpaid principal amount
of advances under this Note exceed the face amount of this Note.
The annual interest rate for this Note is computed on a 365/360 basis; that
is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at Xxxxxx's address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Lender's prime
rate (the "index"). The index is a rate per annum as publicly announced by
Xxxxxx from time to time as its prime rate. The prime rate is not tied to any
external rate or index and it does not necessarily reflect the lowest rate of
interest actually charged by Lender to any particular class or category of
customers. Lender will tell Borrower the current index rate upon Xxxxxxxx's
request. Borrower understands that Lender may make loans based on other rates
as well. The interest rate change will not occur more often than each day.
The index currently is 8.500% per annum. The interest rate to be applied to
the unpaid principal balance of this Note will be at a rate of 3.000
percentage points over the index, resulting in an initial rate of 11.500% per
annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
REPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Xxxxxx in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $100.00,
whichever is less. This late charge shall be paid to Lender by Borrower for
the purpose of defraying the expense incident to the handling of the
delinquent payment.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Any representation or statement made or
furnished to Lender by Borrower or on Xxxxxxxx's behalf is false or misleading
in any material respect either now or at the time made or furnished. (x)
Xxxxxxxx becomes insolvent, a receiver is appointed for any part of Xxxxxxxx's
property, Xxxxxxxx makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any of
Xxxxxxxx's property on or in which Xxxxxx has a lien or security interest.
This includes a garnishment or levy on any of Xxxxxxxx's accounts with Xxxxxx.
(f) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (g) A material
adverse change occurs in Borrower's financial condition, or Xxxxxx believes
the prospect of payment or performance of the indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this
Note to 8.000 percentage points over the index. The interest rate will not
exceed the maximum rate permitted by applicable law. Xxxxxx may hire someone
else to help collect this Note if Borrower does not pay. Xxxxxxxx also will
pay Lender that amount. This includes, subject to any limits under applicable
law, Xxxxxx's attorneys' fees and Xxxxxx's legal expenses whether or not there
is a lawsuit, including attorneys's fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgement collection services.
If not prohibited by applicable law, Xxxxxxxx also will pay any court costs,
in addition to all other sums provided by law. This Note has been delivered
to Lender and accepted by Lender in the State of New Jersey. If there is a
lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to submit to the jurisdiction
of the courts of MIDDLESEX County, the State of New Jersey. Xxxxxx and
Xxxxxxxx hereby waive the right to any jury trial in any action ,proceeding,
or counterclaim brought by either Xxxxxx or Borrower against the other. This
Note shall be governed by and construed in accordance with the laws of the
State of New Jersey.
RIGHT OF SET OFF. Borrower grants to Lender a contractual possessory security
interest, in and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Xxxxxxxx's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all
accounts Borrower may open in the future, excluding however all IRA and Xxxxx
accounts, and all trust accounts for which the grant of a security interest
would be prohibited by law. Borrower authorizes Xxxxxx, to the extent
permitted by applicable law, to charge or setoff all sums owing on this Note
against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested orally by Borrower or by an authorized
person. Lender may, but need not, require that all oral requests be confirmed
in writing. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Xxxxxx's office shown above. The
following party or parties are authorized to request advances under the line
of credit until Xxxxxx receives from Borrower at Xxxxxx's address shown above
written notice of revocation of their authority: XXXXXX X. XXXXXXXXX,
10/10/97 PROMISSORY NOTE PAGE 2
Loan No. (Continued)
_____________________________________________________________________________
PRESIDENT; and XXXXXXX X. XXXXXXXXX, VICE PRESIDENT. Xxxxxxxx agrees to be
liable for all sums either: (a) advanced in accordance with the instructions
of an authorized person or (b) credited to any of Xxxxxxxx's accounts with
Xxxxxx. The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Xxxxxx's internal records,
including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Xxxxxxxx's
accounts with Xxxxxx. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Xxxxxx's internal
records, including daily computer print-outs. Lender will have no obligation
to advance funds under this Note if: (a) Borrower or any guarantor is in
default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or
is insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan
with Lender; or (d) Borrower has applied funds provided pursuant to this Note
for purposes other than those authorized by Lender.
RIGHT OF SET OFF. In addition to all liens upon and rights of setoff against
the moneys, securities or other property of the undersigned given to Lender by
law, Lender shall have, with respect to the undersigned's obligations to
Lender hereunder and to the extent permitted by law, a contractual possessory
security interest in and right of setoff against, and the undersigned hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of the
undersigned's right, title and interest in and to, Lender, whether held in a
general or special account or deposit, whether or not held jointly with
someone else, or whether held for safekeeping or otherwise, excluding however,
all IRA, Xxxxx and trust accounts. Every such security interest and right of
setoff may be exercised without demand upon or notice to the undersigned and
without any prior action of any kind by Xxxxxx. No security interest or right
of setoff shall be deemed to have been waived by any act or conduct on the
part of Lender or by any neglect to exercise such right of setoff or to
enforce such security interest or by any delay in so doing. Every right of
setoff and security interest shall continue in full force and effect until
such fight of setoff or security interest is specifically waived or released
by an instrument in writing executed by Xxxxxx.
FINANCIAL INFORMATION PROVISION. Xxxxxxxx agrees to deliver any financial and
other business information concerning Borrower that Xxxxxx may request from
time to time, such as annual and interim financial statements (all of which
shall be prepared in accordance with generally accepted accounting principles)
and federal income tax returns.
PRIOR NOTE. THIS NOTE IS A RENEWAL OF AND INCREASE IN A NOTE IN THE PRINCIPAL
AMOUNT OF $100,000.00 PAYABLE TO LENDER DATED AUGUST 30, 1996 (THE "ORIGINAL
NOTE"). HOWEVER, WITHOUT DUPLICATION, THIS RENEWAL NOTE SHALL IN NO WAY
EXTINGUISH XXXXXXXX'S OBLIGATION TO REPAY ALL INDEBTEDNESS EVIDENCED BY THE
ORIGINAL NOTE. NOTHING HEREIN IS INTENDED TO IMPAIR THE PRIORITY OR EFFECT OF
ANY SECURITY AGREEMENT WITH RESPECT TO THE BORROWER'S OBLIGATIONS HEREUNDER
AND UNDER ANY OTHER DOCUMENT RELATING HERETO.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length
of time) this loan, or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Xxxxxx's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Xxxxxx may
modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. XXXXXXXX AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
BORROWER:
MEDI-HUT CO., INC.
/s/ Xxxxxx Xxxxxxxxx
By: _________________________________________(SEAL)
XXXXXX X. XXXXXXXXX, PRESIDENT
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