Exhibit 10.14
TERM NOTE
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$400,000.00 Bala Cynwyd, Pennsylvania
Date: August 31, 2003
FOR VALUE RECEIVED, without set-off or deduction, the undersigned, X.
X. XXXX CO., INC., a Delaware corporation ("Maker"), in accordance with the
terms and conditions set forth below, hereby promises to pay to the order of
SOVEREIGN BANK (the "Bank"), the principal sum of up to Four Hundred Thousand
Dollars ($400,000.00), in lawful money of the United States of America, together
with interest thereon from the date hereof at an annual rate equal to the "Prime
Rate" (as defined herein) plus one-half percent (.50%), and both payable as
hereinafter provided; provided, however, that the amount advanced by the Bank in
each instance shall not exceed eighty percent (80%) of the lesser of the net
book value or the current market value of the specific equipment being purchased
and, in the aggregate, shall not exceed $400,000.00.
(a) The "Prime Rate" is the floating annual rate of interest that is
announced from time to time by the Bank as the Prime Rate and is used by the
Bank as a reference base with respect to different rates charged to borrowers.
The Prime Rate shall change simultaneously and automatically upon the Bank's
designation of any change in such Prime Rate. The Bank's determination and
designation from time to time of the referenced rate shall not in any way
preclude the Bank from making loans to other borrowers at a rate which is higher
or lower than or different from the Prime Rate.
(b) Interest on amounts advanced to Maker under this Note shall be
payable monthly, in arrears, on the first day of each month commencing on
September 1, 2003.
(c) The principal balance of this Note shall be payable in
seventy-one (71) equal, consecutive monthly installments of $5,556.00 each, plus
interest thereon, commencing on September 1, 2003, and continuing on the first
day of each month thereafter until August 1, 2009, at which time the remaining
unpaid principal, plus accrued interest thereon, shall be paid in full, or due
in full upon the occurrence of an Event of Default (as defined in Article 8 of
the Loan Agreement).
(d) Upon the occurrence of an Event of Default, the rate of interest
shall be increased to a rate equal to two percent (2%) above the then current
rate of interest specified herein (the "Default Rate"). Interest at the rate
provided for herein, or the Default Rate, shall continue to accrue at such rate,
and continue to be paid even after default, maturity, acceleration, recovery of
judgment, bankruptcy or insolvency proceeding of any kind until such monetary
default has been cured.
(e) If any of the aforesaid payments of principal and interest shall
become overdue for a period in excess of ten (10) days, Maker shall pay the Bank
a "late charge" of five percent (5%) of the monthly principal payment (plus the
accrued interest thereon) then past due.
(f) This Note shall be prepayable by Maker at any time without
penalty or premium.
(g) All payments of principal and interest with regard to this Note
shall be made in lawful money of the United States of America in immediately
available funds at the Bank's office at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 19610, or at such other place as the Bank shall designate in
writing.
(h) Maker shall not be obligated to pay and the Bank shall not
collect interest at a rate in excess of the maximum permitted by law or the
maximum that will not subject the Bank to any civil or criminal penalties. If,
because of the acceleration of maturity, the payment of interest in advance or
any other reason, Maker is required, under the provisions of the Loan and
Security Agreement, dated March 31, 2000, between Maker and the Bank, as amended
(the "Loan Agreement"), to pay interest at a rate in excess of such maximum
rate, the rate of interest under such provisions shall immediately and
automatically be reduced to such maximum rate, and any payment made in excess of
such maximum rate, together with interest thereon at a rate provided herein from
the date of such payment, shall be immediately and automatically applied to the
reduction of the unpaid principal balance of this Note as of the date on which
such excess payment is made. If the amount to be so applied to reduction of the
unpaid principal balance exceeds the unpaid principal balance, the amount of
such excess shall be refunded by the Bank to Maker.
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(i) This Note is the Note referred to in Section 2.8 of the Loan
Agreement and is entitled to all the benefits of such Loan Agreement and all the
security referred to therein. In the event of a conflict between the terms of
this Note and the terms of the Loan Agreement, the terms of the Loan Agreement
shall control.
(j) All of the agreements, conditions, covenants, provisions and
stipulations contained in the Loan Agreement (as defined in said Loan
Agreement), which are to be kept and performed by Maker are hereby made a part
of this Note to the same extent and with the same force and effect as if they
were fully set forth herein, and Maker covenants and agrees to keep and perform
them, or cause them to be kept and performed, strictly in accordance with their
terms.
(k) Upon the occurrence of an Event of Default, then, and in such
event, the Bank may declare this Note to be due and payable, whereupon the
entire unpaid balance of principal, together with all accrued interest thereon,
shall become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived, anything
herein or in the Loan Agreement to the contrary notwithstanding.
(l) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, MAKER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY OF ANY
COURT OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE TO APPEAR AT ANY TIME FOR
MAKER I N ANY ACTION BROUGHT AGAINST SUCH MAKER ON THIS NOTE AT THE SUIT OF THE
BANK, WITH OR WITHOUT DECLARATION FILED, AS OF ANY TERM, AND THEREIN TO CONFESS
OR ENTER JUDGMENT AGAINST MAKER FOR THE ENTIRE UNPAID PRINCIPAL OF THIS NOTE AND
ALL OTHER SUMS PAYABLE BY OR ON BEHALF OF MAKER PURSUANT TO THE TERMS OF THIS
NOTE OR THE LOAN AGREEMENT, AND ALL ARREARAGES OF INTEREST THEREON, TOGETHER
WITH COSTS OF SUIT, ATTORNEY'S COMMISSION FOR COLLECTION OF FIVE PERCENT (5%) OF
THE TOTAL AMOUNT THEN DUE BY MAKER TO THE BANK (BUT IN ANY EVENT NOT LESS THAN
ONE THOUSAND DOLLARS ($1,000)), AND FOR SO DOING THIS NOTE OR A COPY HEREOF
VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE AUTHORITY GRANTED
HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF BUT
SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL
THE AMOUNTS DUE HEREUNDER.
(m) The remedies of the Bank as provided herein or in the Loan
Agreement, and the warranties contained herein or in the Loan Agreement, shall
be cumulative and concurrent, and may be pursued singly, successively, or
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together at the sole discretion of the Bank, and may be exercised as often as
occasion therefor shall occur; and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release thereof.
(n) Maker hereby waives and releases all errors, defects and
imperfections in any proceedings instituted by the Bank under the terms of this
Note or of the Loan Agreement, as well as all benefit that might accrue to Maker
by virtue of any present or future laws exempting any property, real or
personal, or any part of the proceeds arising from any sale of any such
property, from attachment, levy, or sale under execution, or providing for any
stay of execution, exemption from civil process, or extension of time for
payment; and Maker agrees that any real estate that may be levied upon pursuant
to a judgment obtained by virtue hereof, on any writ of execution issued
thereon, may be sold upon any such writ in whole or in part in any order desired
by the Bank.
(o) Maker and all endorsers, sureties and guarantors hereby jointly
and severally waive presentment for payment, demand, notice of demand, protest
and notice of protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of
this Note, and they agree that the liability of each of them shall be
unconditional, without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence, extension of time, renewal, waiver
or modification granted or consent to any and all extensions of time, renewals,
waivers, or payment or other provisions of this Note, and to the release of the
collateral or any part thereof, with or without substitution, and agree that
additional makers, endorsers, guarantors, or sureties may become parties hereto
without notice to them or affecting their liability hereunder.
(p) The Bank shall not be deemed, by any act of omission or
commission, to have waived any of its rights or remedies hereunder unless such
waiver is in writing and signed by the Bank, and then only to the extent
specifically set forth in the writing. A waiver on one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy to a
subsequent event.
(q) This instrument shall be governed by and construed according to
the domestic, internal law (but not the law of conflict of laws) of the
Commonwealth of Pennsylvania.
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(r) Whenever used, the singular number shall include the
plural, the plural the singular, the use of any gender shall be applicable to
all genders, and the words "Bank" and "Maker" shall be deemed to include the
respective successors and assigns of the Bank and Maker.
(s) Any provision contained in this Note which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has
caused this Note to be duly executed by an authorized officer the day and year
first above written.
X. X. XXXX CO., INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
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