Exhibit 4.16
SECURED PROMISSORY NOTE
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$131,570 August 12, 1998
FOR VALUE RECEIVED, PERFORMANCE INTERCONNECT CORP, a Texas
corporation ("Borrower"), promise to pay to the order of FINOVA CAPITAL
CORPORATION, a Delaware corporation ("FINOVA"), at its offices at 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place or
places as FINOVA may from time to time designate in writing, the principal
sum of One Hundred Thirty-One Thousand Five Hundred Seventy Dollars
($131,570), plus interest in the manner and upon the terms and conditions
set forth below. This Secured Promissory Note ("Note") is made pursuant to
that certain Loan and Security Agreement of even date between the FINOVA and
Borrower (the "Loan Agreement"), the provisions of which are incorporated
herein by this reference. Capitalized terms herein, unless otherwise noted,
shall have the meaning set forth in the Loan Agreement.
1.0 Schedule of Payments: Rate and Payment of Interest: Prepayment.
1.1 This Note shall be payable as follows:
a. Twenty-three (23) successive monthly installments of
principal in the amount of Two Thousand Two Hundred Fifty Dollars ($2,250)
together with accrued interest thereon which payment shall be due and deemed
fully earned by FINOVA on the first day of each month, beginning September
1, 1998, and continuing through and including July 1, 2000, and must be
received by FINOVA no later than the 20th day of each month, irrespective of
the date of any monthly statement of account rendered by FIINOVA.
b. A final installment due and payable on the first day of
August, 2000, in the amount of the principal balance together with accrued
interest thereon remaining unpaid.
1.2 Prepayment may be made under this Note in whole but not in
part, subject to the Termination set forth in the Loan Agreement, provided
that such prepayment is preceded by not less than five (5) business days
prior written notice to FINOVA and accompanied by all accrued and unpaid
interest and the full amount of the applicable Termination Fee.
Notwithstanding anything herein to the contrary, in the event the Loan
Agreement is terminated by Borrower, by FINOVA or by any other person at any
time, then the entire unpaid principal balance of this Note, together with
all accrued and unpaid interest hereon and the full amount of the applicable
Termination Fee, shall become immediately due and payable in full on the
effective date of such termination, without presentment, notice or demand of
any kind.
1.3 Interest shall be computed on the basis of a 360-day year
for the actual number of days elapsed, and shall be at the rate of four (4)
percentage points above the Prime Rate (as hereinafter defined), computed on
the basis of a 360-day year; provided, however, upon the occurrence and
during the continuance of an event of default (as hereinafter defined),
interest shall accrue on the outstanding principal balance of this Note at a
default rate (the "Default Rate") of six (6) percentage points above the
Prime Rate, and shall be payable on demand. "Prime Rate" means, for any day,
the rate of interest per annum (over a year of 360 days) announced by
Citibank, N.A. (the "Bank"), from time to time, as its "base rate" (or any
successor thereto) in effect on such day. The Prime Rate is not necessarily
the lowest rate charged by the Bank. As of the date of this Note, the Prime
Rate is [TBD] percent (__%) per annum. The applicable rate of interest
assessed hereunder will be increased or decreased from time to time
hereafter in an amount equal to any increase or decrease hereafter made by
the Bank in the Prime Rate. Notwithstanding the foregoing, the interest
chargeable hereunder shall not exceed 15 1/2% and shall not be less than
9 1/2% provided no event of default has occurred. A change in the Prime
Rate shall be effective on the first day following such change.
2.0 Events of Defaults: Remedies.
2.1 The occurrence of any one of the following events shall
constitute a default by Borrower under this Note (hereinafter an "Event of
Default"): (a) if Borrower fails to pay to FINOVA an installment of
principal or interest hereunder when due; (b) if Borrower fails to pay any
of its Obligations (as defined in the Loan Agreement) to FINOVA when due and
payable or declared due and payable; (c) if Borrower fails or neglects to
perform, keep or observe any term, provision, covenant, warranty or
representation contained in this Note or the Loan Agreement (other than as
referred to in (a) or (b) of this paragraph). which is required to be
performed, kept or observed by Borrower or if a default occurs under the
Loan Agreement; or (d) the occurrence of a default or an event of default
under any agreement, instrument or document heretofore, now or at any time
or times hereafter delivered to FINOVA by Borrower or by any guarantor of
part or all of Borrower s Obligations to FINOVA.
2.2 Upon the occurrence of any Event of Default hereunder, in
addition to FINOVA's right to charge interest on the Obligations at the
Default Rate: (a) at the option of FINOVA, the entire unpaid amount of all
of the Obligations, including without limitation the Termination Fee, shall
become immediately due and payable without demand, notice or legal process
of any kind; (b) FINOVA may, at its option, without demand, notice or legal
process of any kind, exercise any and all rights and remedies granted to it
by the Loan Agreement or by any other agreement now or hereafter existing
between FINOVA and Borrower or between FINOVA and any guarantor of part or
all of Borrower's liabilities to FINOVA; and (c) FINOVA may at its option
exercise from time to time any other fights and remedies available to it
under the Uniform Commercial Code or other law of the State of Arizona.
2.3 The remedies of FINOVA as provided herein and in the Loan
Agreement shall be cumulative and concurrent, and may be pursued singularly,
successively, or together, at the sole discretion of FINOVA. No act of
omission or commission of FINOVA, including specifically any failure to
exercise any fight, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by FINOVA and then only to the extent specifically
recited therein. A waiver or release with reference to any 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 a subsequent event.
3.0 General Provisions.
3.1 Borrower warrants and represents to FINOVA that Borrower has
used and will continue to use the loans and advances represented by this
Note solely for proper business purposes, and consistent with all applicable
laws and statutes.
3.2 This Note is secured by the Collateral described in Schedule
"A" attached hereto, and is further secured by the Collateral described in
the Loan Agreement.
3.3 Borrower waives presentment, demand and protest, notice of
protest, notice of presentment and all other notices and demands in
connection with the enforcement of FINOVA's rights hereunder, except as
specifically provided and called for by this Note, and hereby consents to,
and waives notice of, the release, addition, or substitution, with or
without consideration, of any collateral or of any person liable for payment
of this Note. Any failure of FINOVA to exercise any right available
hereunder or otherwise shall not be construed as a waiver of the right to
exercise the same or as a waiver of any other right at any other time.
3.4 If this Note is not paid when due or upon the occurrence of
an Event of Default, Borrower further promises to pay all costs of
collection, foreclosure fees, attorneys fees and expert witness fees
incurred by FINOVA, whether or not suit is filed hereon, and the fees, costs
and expenses as provided in the Loan Agreement.
3.5 The contracted for rate of interest of the loan contemplated
hereby, without limitation, shall consist of the following: (i) the interest
rate set forth on the Schedule, calculated and applied to the principal
balance of this Note in accordance with the provisions of this Note: (ii)
interest after an Event of Default, calculated and applied to the amounts
due under this Note in accordance with the provisions hereof; and (iii) all
Additional Sums (as herein defined), if any. Xxxxxxxx agrees to pay an
effective contracted for rate of interest which is the sum of the above-
referenced elements. All examination fees, attorneys fees, expert witness
fees, letter of credit fees, collateral monitoring fees, closing fees,
facility fees, Termination Fees, Minimum Interest Charges, other charges,
goods, things in action or any other sums or things of value paid or payable
by Borrower (collectively, the "Additional Sums"), whether pursuant to this
Note, the Loan Agreement or any other documents or instruments in any way
pertaining to this lending transaction, or otherwise with respect to this
lending transaction, that under any applicable law may be deemed to be
interest with respect to this lending transaction, for the purpose of any
applicable law that may limit the maximum amount of interest to be charged
with respect to this lending transaction, shall be payable by Borrower as,
and shall be deemed to be, additional interest and for such purposes only,
the agreed upon and "contacted for rate of interest" of this lending
transaction shall be deemed to be increased by the rate of interest
resulting from the inclusion of the Additional Sums,
3.6 It is the intent of the parties to comply with the usury law
of the State of Arizona (the "Applicable Usury Law"). Accordingly, it is
agreed that notwithstanding any provisions to the contrary in this Note, or
in any of the documents securing payment hereof or otherwise relating
hereto, in no event shall this Note or such documents require the payment or
permit the collection of interest in excess of the maximum Interest Rate,
then in any such event (1) the provisions of the paragraph shall govern and
control, (2) neither Borrower nor any other person or entity now or
hereafter liable for the payment hereof shall be obligated to pay the amount
of such interest to the extent that it is in excess of the Maximum Interest
Rate, (3) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal amount hereof or
refunded to Borrower, at FINOVA's option, and (4) the effective rate of
interest shall be automatically reduced to the Maximum Interest Rate. It is
further agreed, without limiting the generality of the foregoing, that to
the extent permitted by the Applicable Usury Law; (x) all calculations of
interest which are made for the purpose of determining whether such rate
would exceed the Maximum Interest Rate shall be made by amortizing,
prorating, allocating and spreading during the period of the full stated
term of the loan evidenced hereby, all interest at any time contracted for,
charged or received from Borrower or otherwise in connection with such loan;
and (y) in the event that the effective rate of interest on the loan should
at any time exceed the Maximum Interest Rate, such excess interest that
would otherwise have been collected had there been no ceiling imposed by the
Applicable Usury Law shall be paid to FINOVA from time to time, if and when
the effective interest rate on the loan otherwise fall below the Maximum
Interest Rate, until the entire amount of interest which would otherwise
have been collected had there been no ceiling imposed by the Applicable
Usury Law has been paid in full. Borrower further agrees that should the
Maximum Interest Rate be increased at any time hereafter because of a change
in the Applicable Usury Law, then to the extent not prohibited by the
Applicable Usury Law, such increases shall apply to all indebtedness
evidenced hereby regardless of when incurred; but, again to the extent not
prohibited by the Applicable Usury Law, should the maximum Interest Rate be
decreased because of a change in the Applicable Usury Law, such decreases
shall not apply to the indebtedness evidenced hereby regardless of when
incurred.
3.7 FINOVA may at any time transfer this Note and FINOVA's
rights in any or all collateral securing this Note, and FINOVA thereafter
shall be relieved from all liability with respect to such collateral arising
after the date of such transfer.
3.8 This Note shall be binding upon Borrower and its legal
representatives, successors and assigns. Wherever possible, each provision
of this Note shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of the Note shall be
prohibited by or invalid under such law, such provision shall be severable,
and be ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provision of this Note.
THIS NOTE HAS BEEN DELIVERED FOR ACCEPTANCE BY FINOVA IN PHOENIX,
ARIZONA AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE STATE
OF ARIZONA, AS THE SAME MAY FROM TIME TO TIME BE IN EFFECT, INCLUDING,
WITHOUT LIMITATION, THE UNIFORM COMMERCIAL CODE AS ADOPTED IN ARIZONA.
BORROWER HEREBY (i) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN MARICOPA COUNTY, ARIZONA OVER ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS
NOTE; (ii) WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON BORROWER,
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MESSENGEW
CERTIFIED MAIL OR REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS SET
FORTH BELOW AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN
POSTED TO BORROWER'S ADDRESS; (iii) IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT BORROWER MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING; (iv) AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW; (v) AGREES NOT TO INSTITUTE ANY LEGAL ACTION
OR PROCEEDING AGAINST FINOVA OR ANY OF FINOVA'S DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER ARISING OUT OF OR
RELATING TO THIS NOTE IN ANY COURT OTHER THAN ONE LOCATED IN MARICOPA
COUNTY, ARIZONA; AND (vi) IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS NOTE. NOTHING IN
THIS PARAGRAPH SHALL AFFECT OR IMPAIR FINOVA'S RIGHT TO SERVE LEGAL PROCESS
IN ANY MANNER PERMITTED BY LAW OR FINOVA'S RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER OR BORROWERS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION.
PERFORMANCE INTERCONNECT CORP
a Texas corporation
By: /s/
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Xxxxxx X. Xxxxxxxx, President
"Borrower"
Federal Taxpayer Identification
Number: 00-0000000
Address: 0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
