EXHIBIT 10.39
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS OF THIS AGREEMENT
MARKED [*]. THE OMITTED PORTIONS OF THIS AGREEMENT HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
REVOLVING CREDIT PROMISSORY NOTE
(INVENTORY)
$500,000.00 March 2, 1998
FOR VALUE RECEIVED, on or before May 28, 1999 ("Maturity Date"), the
undersigned and if more than one, each of them, jointly and severally
(hereinafter referred to as "Borrower"), promises to pay to the order of [*]
("[*]") at its offices in [*], [*], at [*], [*], [*], [*], the principal
amount of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) ("Total
Principal Amount"), or such amount less than the Total Principal Amount which
is outstanding from time to time if the total amount outstanding under this
Revolving Credit Promissory Note ("Note") is less than the Total Principal
Amount, together with interest at the rate set forth below on such portion of
the Total Principal Amount which has been advanced to Borrower from the date
advanced until paid.
INTEREST RATE. The unpaid principal amount of this Note shall bear interest
at a fluctuating rate per annum which shall from day to day be equal to the
lesser of (a) the Maximum Rate (as hereinafter defined), or (b) a rate
("Contract Rate"), calculated on the basis of the actual days elapsed but
computed as if each year consisted of 360 days, equal to the sum of (i) the
Base Rate of interest ("Base Rate") as established from time to time by [*]
(which may not be the lowest, best or most favorable rate of interest which
[*] may charge on loans to its customers) plus (ii) two percent (2.0%) each
change in the rate to be charged on this Note to become effective without
notice to Borrower on the effective date of each change in the Maximum Rate
or the Base Rate, as the case may be; provided, however, in no event shall
the Contract Rate be less than seven percent (7.0%) per annum; provided,
further that if at any time the Contract Rate shall exceed the Maximum Rate,
thereby causing the interest on this Note to be limited to the Maximum Rate,
then any subsequent reduction in the Base Rate shall not reduce the rate of
interest on this Note below the Maximum Rate until the total amount of
interest accrued on this Note equals the amount of interest which would have
accrued on this Note if the Contract Rate had at all times been in effect.
The term "Maximum Rate", as used herein, shall mean at the particular time in
question the maximum rate of interest which, under applicable law, may then
be charged on this Note. If such maximum rate of interest changes after the
date hereof, the Maximum Rate shall be automatically increased or decreased,
as the case may be, without notice to Borrower from time to time as of the
effective date of each change in such maximum rate. If applicable law ceases
to provide for such a maximum rate of interest, the Maximum Rate shall be
equal to the Base Rate, plus six and one-half percent (6.5%).
REPAYMENT TERMS. The principal of and all accrued but unpaid interest on this
Note shall be due and payable as follows:
(a) interest shall be due and payable monthly as it accrues,
commencing on the 15th day of March, 1998 and continuing on the
15th day of each successive month thereafter during the term of
this Note; and
(b) the outstanding principal balance of this Note, together with all
accrued but unpaid interest, shall be due and payable on the
Maturity Date.
Borrower authorizes [*] to effect all payments due under this Note and to
collect all sums due hereunder (whether by acceleration or otherwise) by
debiting Borrower's account number [*] at [*] (the "Debit Account") through
the Automated Clearing House system ("ACH"). Such authorization shall not
affect the obligations of Borrower to make all payments when due hereunder.
If on any payment date there are insufficient funds in the Debit Account to
make such payments in full, Xxxxxxxx agrees to pay [*] on demand a $100.00
manual processing fee. All payments of principal or interest on this Note
shall be made in lawful money of the United States of America in immediately
available funds, and, if such payments are not made via ACH, shall be made at
[*]'s address indicated above, or such other place as the holder of this Note
shall designate in writing to Borrower. If any payment of principal of or
interest on this Note shall become due on a day which is not a Business Day
(as hereinafter defined), such payment shall be made on the next succeeding
Business Day and any such extension of time shall be included in computing
interest in connection with such payment. As used herein, the term "Business
Day" shall mean any day other than a Saturday, Sunday or any other day on
which [*]'s office in [*], [*]is closed. All regularly scheduled payments of
the indebtedness evidenced by this Note shall be applied first to any accrued
but unpaid interest then due and payable hereunder and then to the principal
amount then due and payable. The books and records of [*] shall be prima
facie evidence of all outstanding principal of and accrued and unpaid
interest on this Note. To the extent that any interest is not paid on or
before the fifth day after it becomes due and payable, [*] may, at its
option, add such accrued interest to the principal of this Note.
Notwithstanding anything herein to the contrary, upon an Event of Default (as
hereinafter defined) or at maturity, whether by acceleration or otherwise,
all principal of this Note shall, at the option of [*], bear interest at a
fixed rate equal to 18% per annum until paid.
PREPAYMENT PENALTY. Borrower may from time to time prepay all or any portion of
the outstanding principal balance of this Note without premium or penalty;
provided, however, if (a) the outstanding principal balance hereof is prepaid in
full, and (b) Borrower notifies [*] of Borrower's intention to terminate
financing under this Note prior to the Maturity Date, then, in addition to such
principal prepayment, there shall be due and owing by Borrower at such time a
prepayment penalty equal to 3.0% of the Total Principal Amount. Furthermore,
should Borrower notify [*] of Xxxxxxxx's intention to voluntarily terminate the
Purchase Agreement (as hereinafter defined), it shall be deemed notification by
Borrower to [*] of Borrower's intention to voluntarily terminate financing under
this Note and to prepay this Note in full on the same day of the effective date
of termination of the Purchase Agreement, such prepayment to be subject to the
terms and conditions of the foregoing prepayment penalty. Notwithstanding the
foregoing, in the event the [*] Base Rate exceeds the Bank One, [*], N.A. Base
Rate by more than 100 basis points for more than 30 consecutive days (the "Rate
Termination Event"), Seller shall have the right for 30 days after such event to
terminate this Agreement without payment of the termination fee; provided,
however, Seller must notify [*] in writing of its intention to so terminate
within 10 days after the occurrence of a Rate Termination Event.
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LOAN DOCUMENTS. This Note is subject to the terms and conditions set forth
in that certain Loan Agreement dated May 29, 1997 by and between Xxxxxxxx and
[*], as may be amended from time to time (the "Loan Agreement). This Note,
the Loan Agreement and all other documents evidencing, securing, governing,
guaranteeing and/or pertaining to this Note are hereinafter collectively
referred to as the "Loan Documents". The holder of this Note is entitled to
the benefits and security provided in the Loan Documents.
ADVANCES. Subject to the terms of the Loan Agreement, Xxxxxxxx may request
advances and make payments hereunder from time to time, provided that it is
understood and agreed that the aggregate principal amount outstanding from
time to time hereunder shall not at any time exceed the Total Principal
Amount. The unpaid balance of this Note shall increase and decrease with
each new advance or payment hereunder, as the case may be. This Note shall
not be deemed terminated or canceled prior to the Maturity Date, although the
entire principal balance hereof may from time to time be paid in full.
Subject to the terms of this Note and the other Loan Documents, Borrower may
borrow, repay and reborrow hereunder.
PURPOSE. Xxxxxxxx agrees that no advances under this Note shall be used for
personal, family or household purposes, and that all advances hereunder shall
be used solely for business, commercial, investment or other similar purposes.
EVENT OF DEFAULT. Xxxxxxxx agrees that upon the occurrence of any one or
more of the following events of default ("Event of Default"):
(a) failure of Borrower to pay when due any installment of principal
of or interest on this Note or on any other indebtedness now or
hereafter owing by Borrower to [*]; or
(b) the occurrence of any event of default specified in any of the
other Loan Documents; or
(c) the occurrence of an event of default or the breach of any term
or covenant under that certain Revolving Account Transfer and
Purchase Agreement (Batch) dated March 2, 1998 between [*],
Borrower and Surgx Corporation, as may be amended from time to
time (the "Purchase Agreement") or if the Purchase Agreement
terminates or is terminated by either party for any reason; or
(d) the bankruptcy or insolvency of, the assignment for the benefit
of creditors by, or the appointment of a receiver for any of the
property of, or the liquidation, termination, dissolution or
death or legal incapacity of Borrower;
the holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid
interest on this Note at once due and payable, (ii) refuse to advance any
additional amounts under the Note, (iii) foreclose all liens securing payment
hereof, (iv) pursue any and all other rights, remedies and recourses
available to the holder hereof, including but not limited to any such rights,
remedies or recourses under the other Loan Documents, at law or in equity, or
(v) pursue any combination of the foregoing. The failure to exercise the
option to accelerate the maturity of this Note or any other right remedy or
recourse available to the holder hereof upon the occurrence of an Event of
Default hereunder shall not constitute a waiver of the right of the holder of
this Note to exercise the same at that time or at any subsequent time with
respect to such Event of Default or any other Event of Default. The rights,
remedies and recourses of the holder hereof, as provided in this Note and in
any of the other Loan Documents, shall be cumulative and concurrent and may
be pursued separately, successively or together as often as occasion
therefore shall arise, at the sole discretion of the holder hereof. The
acceptance by the holder hereof of any payment under this Note which is less
than the payment in full of all amounts due and payable at the time of such
payment shall not (i) constitute a waiver of or impair, reduce, release or
extinguish any right, remedy or recourse of the holder hereof, or nullify any
prior exercise of any such right, remedy or recourse, or (ii) impair, reduce,
release or extinguish the obligations of any party liable under any of the
other Loan Documents as originally provided herein or therein.
COMPLIANCE WITH USURY LAWS. This Note and the other Loan Documents are
intended to be performed in accordance with, and only to the extent permitted
by, all applicable usury laws. Accordingly, notwithstanding any provision to
the contrary in this Note or any of the other Loan Documents, in no event
whatsoever shall this Note or any of the other Loan Documents require the
payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws which exceed
the maximum amount permitted by such laws. If any such excess interest is
called for, contracted for, charged, taken, reserved, or received in
connection with this Note or any of the other Loan Documents, or in any
communication by [*] or any other person to Borrower or any other person, or
in the event all or part of the principal or interest shall be prepaid or
accelerated, so that under any of such circumstances or under any other
circumstance whatsoever the amount of interest contracted for, charged,
taken, reserved, or received on the amount of principal actually outstanding
from time to time under this Note or any of the other Loan Documents shall
exceed the maximum amount of interest permitted by applicable usury laws,
then in any such event it is agreed as follows: (i) the provisions of this
Section shall govern and control; (ii) neither Borrower nor any other person
or entity now or hereafter liable for payments under this Note or any of the
other Loan Documents shall be obligated to pay the amount of such interest to
the extent such interest is in excess of the maximum amount of interest
permitted by applicable usury laws; (iii) any such excess which is or has
been received notwithstanding this Section shall be credited against the then
unpaid principal balance of this Note and the other Loan Documents or, if
this Note or any of the other Loan Documents has been or would be paid in
full by such credit, refunded to Borrower, and (iv) the provisions of this
Note or any of the other Loan Documents, and any communication to Borrower,
shall immediately be deemed reformed and such excess interest reduced,
without the necessity of executing any other document, to the maximum lawful
rate allowed under applicable laws as now or hereafter construed by courts
having jurisdiction hereof or thereof. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken,
reserved, or received in connection herewith which are made for the purpose
of determining whether such rate exceeds the maximum lawful rate shall be
made to the extent permitted by applicable laws by amortizing, prorating,
allocating and spreading during the period of the full term of this Note or
any of the other Loan Documents, including all prior and subsequent renewals
and extensions, all interest at any time contracted for, charged, taken,
reserved, or received. The terms of this Section shall be deemed to be
incorporated into every other Loan Document.
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Borrower and [*] agree that Chapter [*] of the [*] Finance Code, formerly
Chapter [*] of the [*] Revised Civil Statutes (which regulates certain
revolving loan accounts and revolving tri-party accounts) shall not apply to
any revolving loan accounts created under this Note or maintained in
connection therewith.
To the extent that the interest rate laws of the State of [*] are applicable
to this Note, the applicable interest rate ceiling is the indicated (weekly)
ceiling determined in accordance with Article [*] of the [*] Revised Civil
Statutes, as amended, and, to the extent that this Note is deemed an open end
account as such term is defined in Article [*] of the [*] Revised Civil
Statutes, as amended, [*] retains the right to modify the interest rate in
accordance with applicable law. As used in this Note, the term "applicable
law" means the laws of the State of [*] laws or the United States of America,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
COSTS OF COLLECTION; WAIVERS. If this Note is placed in the hands of an
attorney for collection, or is collected in whole or in part by suit or
through probate, bankruptcy or other legal proceedings of any kind, Xxxxxxxx
agrees to pay, in addition to all other sums payable hereunder, all costs and
expenses of collection, including but not limited to reasonable attorneys'
fees. Borrower and any and all endorsers and guarantors of this Note
severally waive presentment for payment, notice of nonpayment, protest,
demand, notice of protest, notice of intent to accelerate, notice of
acceleration and dishonor, diligence in enforcement and indulgences of every
kind and without further notice hereby agree to renewals, extensions,
exchanges or releases of collateral, taking of additional collateral
indulgences or partial payments, either before or after maturity.
RENEWAL AND EXTENSION. This Note is given in renewal and extension, but not
extinguishment, of all amounts left owing and unpaid under that certain
Revolving Credit Promissory Note dated May 29, 1997 executed and delivered by
Xxxxxxxx and payable to the order of [*] in the stated principal amount of
$1,500,000.00.
GOVERNING LAW; VENUE; SUBMISSION TO JURISDICTION. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF [*]
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. THIS
NOTE IS PERFORMABLE IN [*], [*]. XXXXXXXX AGREES THAT [*], SHALL BE
THE EXCLUSIVE VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM ARISING UNDER OR
RELATING TO THIS NOTE, AND THAT SUCH COUNTY IS A CONVENIENT FORUM IN WHICH TO
DECIDE ANY SUCH DISPUTE OR CLAIM. BORROWER CONSENTS TO THE PERSONAL
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN [*], [*] FOR THE
LITIGATION OF ANY SUCH DISPUTE OR CLAIM. BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
WAIVER OF JURY TRIAL. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR
ASSOCIATED HEREWITH.
FINAL AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN [*] AND BORROWER WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN 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.
BORROWER:
ORYX TECHNOLOGY CORP.
By: ________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
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