EXHIBIT 6.1
Ultimate Sports, Inc. The Farmers State Bank Line of Credit No. 35325
0000 X 00xx Xx 000 X Xxxxxxx Xxxxxx Xxxx 00-00-0000
Xxxxxxxxx, XX 00000 Brookston, IN 47923-0159 Max. Credit Amt. 50,000.00
Loan Ref. No. 35325
XXXXXXXX'S NAME XXXXXX'S NAME
AND ADDRESS AND ADDRESS
"I" includes each "You" means the lender, its
borrower above, successors and assigns.
jointly and severally.
You have extended to me a line of credit in the
AMOUNT OF fifty thousand and no/100 $50,000.00
You will make loans to me from time to time until 12:00 p.m. on 05-04-2002.
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:
X 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;
___ DISCRETIONARY: You may refuse to make a loan to me under this
line of credit once the aggregate outstanding advances equal or
exceed ________.
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 05-04-2001, 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: funds to be advanced for operating expenses for Ultimate
Sports, Inc.
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 07-28-2000
X UCC 1 recorded 08-17-00
___ mortgage dated ________
___ guaranty dated ________
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. By 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 by 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;
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 permits you and me to agree to such a variation.
For the Lender SIGNATURES: I AGREE TO THE TERMS OF THIS LINE
OF CREDIT. I HAVE RECEIVED A COPY ON TODAY'S
DATE
Xxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxx
Title: Sr. Vice President Xxxxx X. Xxxxxxx, President
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Individually
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Individually
Ultimate Sports, Inc. The Farmers State Bank Loan Number 35325
0000 X 00xx Xx 000 X Xxxxxxx Xxxxxx Date 05-04-2001
Lafayette, IN 47904 Brookston, IN 47923-0159 Maturity Date 05-04-2005
Loan Amount $50,000.00
Renewal of
XXXXXXXX'S NAME XXXXXX'S NAME
AND ADDRESS AND ADDRESS
"I" includes each "You" means the lender, its
borrower above, successors and assigns.
jointly and severally.
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of fifty thousand 00/100 Dollars $50,000.00
___ 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 05-04-2001
I will receive the amount of $30,000.00 and future principal
advances are contemplated.
Conditions: The conditions for future advances are funds to be
advanced for operating expenses for Ultimate Sports, Inc.
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
05-04-2002.
___ 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 05-04-2001 at the rate of 9.000% per year until 05-04-2002.
___ Variable Rate: This rate may then change as stated below.
___ Index Rate: The future rate will be ________ the following index
rate:
___ No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
___ 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
________%. The rate may not change more than ________% each
________.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
___ The amount of each scheduled payment w ill change.
___ The amount of the final payment will change.
ACCRUAL METHOD: Interest will be calculated on an Actual/365 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:
___ on the same fixed or variable rate basis in effect before
maturity (as indicated above).
X at a rate equal to initial rate plus 3%.
___ LATE CHARGE: If a payment is made more than ____ days after it is due,
I agree to pay a late charge of ________.
___ 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:
Monthly payments of accrued interest calculated on the amount of credit
outstanding beginning on 06-04-2001 and principal due on 05-04-2002.
___ Unpaid Interest: 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.
ADDITIONAL TERMS:
X SECURITY: This note is separately secured by (describe separate
document by type and date): Security Agreement dated July 28,
2000 and UCC 1 recorded with Secretary of State
PURPOSE: The purpose of this loan is operating line of credit.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
Ultimate Sports, Inc.
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Individually
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Individually
Signature for Lender
Xxxx X. Xxxxx, Vice President
Page 1 of 2
DEFINITIONS: As used on page 1, "X" means the terms that apply to this
loan. "I," "me" or "my" means each Borrower who signs this note and each
other person or legal entity (including guarantors, endorsers, and
sureties) who agrees to pay this note (together referred to as "us").
"You" or "your" means the Lender and its successors and assigns.
APPLICABLE LAW: The law of the state of Indiana 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: Interest accrues on the principal remaining unpaid from time to
time, until paid in full. 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 advanced 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 you could charge under applicable law for the
extension of credit that is 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) I do or fail to do something
which causes you to believe that you will have difficulty collecting the
amount I owe you; (8) any collateral securing this note is used in a manner
or for a purpose which threatens confiscation by a legal authority; (9) I
change my name or assume an additional name without first notifying you
before making such a change; (10) I fail to plant, cultivate and harvest
crops in due season; (11) 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 other accrued 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).
I waive any defenses I have based on suretyship or impairment of
collateral. I also give up any rights I may have under any valuation and
appraisement laws which apply to me.
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.
Page 2 of 2
