1
LOAN AGREEMENT
Date: Effective as of October 16, 1997
Borrower: BIT GROUP SERVICES, INC.
a Delaware corporation
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Lender: BIT INVESTORS, LLC
a Texas limited liability company
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
This Loan Agreement (the "Agreement") is made on the above date by and
between Borrower and Lender, each as identified above.
1. THE LOAN.
A. Lender agrees to make line of credit loans to the Borrower,
including the renewal, extension and modification of loans
outstanding on the date hereof in the aggregate principal
amount of ONE HUNDRED TWENTY-NINE THOUSAND SEVEN HUNDRED
NINETY-SIX AND EIGHTY-FOUR HUNDREDTHS DOLLARS ($129,796.84 ),
together with such amounts as the Borrower may request from
time to time up to the maximum amount hereinafter stated, and
the Borrower may make borrowings and prepayments and
reborrowings in respect thereof; provided, however, that the
aggregate principal amount of all such loans at any one time
outstanding shall not exceed the sum of ONE MILLION, EIGHT
HUNDRED THOUSAND DOLLARS ($1,800,000.00) (the "Loan") on the
terms and conditions set forth herein. The Loan will be
evidenced by Borrower's promissory note or notes in the form
or forms attached hereto as Exhibit "A" or any renewal thereof
with interest and principal payable as stated therein (the
"Note").
B. The final maturity date of the Loan will be the earlier of
June 1, 1998 or thirty days following the successful
completion of Borrower's proposed IPO. For the purposes of
this Agreement, the term "IPO" shall mean any underwritten
public offering of the Company's common stock other than any
offering pursuant to any registration statement (i) relating
to any capital stock of the Company or options, warrants or
other rights to acquire any such capital stock issued or to be
issued primarily to directors, officers or employees of the
Company, or any of its subsidiaries (ii) relating to any
employee benefit plan or interest therein, (iii) relating
principally to any preferred stock or debt securities of the
Company, or (iv) filed pursuant to Rule 145 under the
Securities Act of 1933, as amended, or any successor or
similar provisions.
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2. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender as follows:
A. GOOD STANDING. Borrower is a corporation, duly organized and
in good standing, under the laws of Delaware and has the power
to own its property and to carry on its business in each
jurisdiction in which the Borrower operates.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and
authority to enter into this Agreement, to make the borrowing
hereunder, to execute and deliver the Note and to incur the
obligations provided for herein, all of which has been duly
authorized by all proper and necessary action. No consent or
approval by any stockholder or public authority is required as
a condition to the validity of this Agreement or the Note (or
if required, has been obtained), and Borrower is in compliance
with all laws and regulatory requirements to which it is
subject.
C. BINDING AGREEMENT. This Agreement constitutes, and the Note
when issued and delivered pursuant hereto for value received
will constitute, valid and legally binding obligations of
Borrower enforceable in accordance with their respective
terms.
D. NO CONFLICTING AGREEMENTS. There are no charter, bylaw or
stock provisions of Borrower and no provisions of any existing
agreement, mortgage, indenture or contract binding on Borrower
or affecting its property, which would conflict with or in any
way prevent the execution, delivery or carrying out of the
terms of this Agreement and the Note.
E. OWNERSHIP OF ASSETS. Borrower has good title to all of the
tangible and intangible personalty and realty used in its
business operations and such property is owned free and clear
of any liens, encumbrances, or adverse claims of any type or
nature. Borrower will at all times maintain its tangible
property, real and personal, in good order and repair, taking
into consideration reasonable wear and tear.
F. TAXES. All taxes and assessments due and payable by Borrower
have been paid or are being contested in good faith by
appropriate proceedings and the Borrower has filed all tax
returns which it is required to file.
G. FINANCIAL STATEMENTS. The financial statements of Borrower
heretofore delivered to Lender have been prepared in
accordance with GAAP applied on a consistent basis throughout
the period involved and fairly present Borrower's financial
condition as of the date or dates thereof, and there has been
no material adverse change in Borrower's financial condition
or operations since the dates thereof. To the best of
Borrower's knowledge, all factual information furnished by
Borrower to Lender in connection with this Agreement and the
other Loan Documents is and will be accurate and complete on
the date as of which such information is delivered to
Loan Agreement/Page 2 of 8
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Lender and is not and will not be incomplete by the omission
of any material fact necessary to make such information not
misleading.
3. AFFIRMATIVE COVENANTS. So long as Borrower may borrow hereunder and
until payment in full of the Note and performance of all other
obligations of Borrower hereunder, Borrower will:
A. FINANCIAL RECORDKEEPING. Maintain a system of accounting that
is substantively reasonable and customary for a company such
as borrower and in accordance with generally accepted
accounting principles consistently applied, and will permit
Lender's officers or authorized representatives to visit and
inspect Borrower's books of account and other records at such
reasonable times and as often as Lender may desire, and will
pay the reasonable fees and disbursements of any accountants
or other agents of Lender selected by Lender for the foregoing
purposes; and unless written notice of another location is
given to Lender, Borrower's books and records will be located
at the address set forth on the first page of this Agreement.
B. FINANCIAL AND OTHER REPORTING.
(1) Furnish to Lender year-end financial statements to
include a balance sheet, operating statement and
surplus reconciliation, together with an officer's
certificate of compliance with this Agreement
including computations of all quantitative covenants,
within 90 days after the end of each annual
accounting period.
(2) Furnish to Lender quarterly financial statements, to
include a balance sheet and profit and loss
statement, together with an officer's certificate of
compliance with this Agreement including computations
of all quantitative covenants, within 30 days of the
end of each quarterly accounting period.
(3) Promptly provide Lender with such additional
information, reports or statements respecting its
business operations and financial condition as Lender
may reasonably request from time to time.
C. INSURANCE. Maintain insurance with responsible insurance
companies on such of its properties, in such amounts and
against such risks as is customarily maintained by similar
businesses operating in the same vicinity, specifically to
include a policy of fire and extended coverage insurance
covering all assets, business interruption insurance and
liability insurance, all to be with such companies and in such
amounts satisfactory to Lender and to contain a mortgagee
clause naming Lender as its interest may appear; and evidence
of such insurance will be supplied to Lender.
Loan Agreement/Page 3 of 8
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D. EXISTENCE AND COMPLIANCE WITH LAWS. As appropriate, maintain
its existence in good standing and comply with all laws,
regulations and governmental requirements applicable to it or
to any of its property, business operations and transactions.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Lender in
writing of (i) any condition, event or act which comes to its
attention that would or might materially adversely affect
Borrower's financial condition or operations, or Lender's
rights under the Loan Documents, (ii) any litigation filed by
or against Borrower, (iii) any event that has occurred that
would constitute an event of default under any Loan Documents
and (iv) any uninsured or partially uninsured loss through
fire, theft, liability or property damage in excess of an
aggregate of $10,000.
F. TAXES. Pay all of its taxes, assessments and other
obligations, including, but not limited to taxes, costs or
other expenses arising out of this transaction, as the same
become due and payable, except to the extent the same are
being contested in good faith by appropriate proceedings in a
diligent manner.
G. MAINTENANCE. Maintain all of its tangible property in good
condition and repair and make all necessary replacements
thereof, and preserve and maintain all licenses, privileges,
franchises, certificates and the like necessary for the
operation of its business.
4. NEGATIVE COVENANTS. So long as Borrower may borrow hereunder and
until payment in full of the Note and performance of all other
obligations of Borrower hereunder, Borrower will not, without the
prior written consent of Lender:
A. TRANSFER OF ASSETS OR CONTROL. Sell, lease, assign or
otherwise dispose of all or substantially all of the assets or
properties of Borrower, or enter into any merger,
consolidation, or other business combination, unless Borrower
is the surviving corporation.
B. LIENS. Knowingly grant, suffer or permit liens on or security
interests in any Borrower's assets, or fail to promptly pay
all lawful claims, whether for labor, materials or otherwise,
other than liens with respect to assets of Borrower's
subsidiaries.
C. LOANS. Make any loans, advances or investments to or in any
joint venture, corporation or other entity, except for the
purchase of obligations of Lender or U.S. Government
obligations, and loans, advances or investments to or in
subsidiaries of Borrower.
D. BORROWINGS. Create, incur, assume or become liable in any
manner for any indebtedness (for borrowed money, deferred
payment for the purchase of assets, lease
Loan Agreement/Page 4 of 8
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payments, as surety or guarantor for the debt of another, or
otherwise) other than to Lender, except for indebtedness with
a maturity of less than one year and normal trade debts
incurred in the ordinary course of Borrower's business.
E. CHARACTER OF BUSINESS. Change the general character of
business as conducted at the date hereof, or engage in any
type of business not reasonably related to its business as
presently and normally conducted.
F. VIOLATE OTHER COVENANTS. Violate or fail to comply with any
covenants or agreements regarding other debt which will or
would with the passage of time or upon demand cause the
maturity of any other debt to be accelerated.
5. EVENTS OF DEFAULT. If one or more of the following events of default
shall occur, all outstanding principal plus unpaid interest of the
Loan and any other indebtedness of Borrower to Lender shall, at the
option of Lender, be due and payable immediately and Lender shall have
no further obligation to fund under this Agreement or the Note:
A. Default shall be made in the payment of any installment of
principal or interest upon the Note or any other obligation of
Borrower to Lender when due and payable, whether at maturity
or otherwise; or
B. Default shall be made in the performance of any term, covenant
or agreement contained herein or in any deed of trust,
security agreement, mortgage, assignment, guaranty or other
contract or agreement evidencing, executed in connection with
or securing payment or any indebtedness of Borrower to Lender;
or
C. Any representation or warranty herein contained or in any
financial statement, certificate, report or opinion submitted
to Lender in connection with the Loan or pursuant to the
requirements of this Agreement shall prove to have been
incorrect or misleading in any material respect when made; or
D. Any judgment against Borrower or any attachment or other levy
against the property of Borrower with respect to a claim
remains unpaid on appeal, undischarged, not bonded or not
dismissed for a period of 30 days; or
E. Borrower makes an assignment for the benefit of creditors,
admits in writing its inability to pay its debts generally as
they become due, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any
tribunal for any receiver or any trustee of Borrower or any
substantial part of its property, commences any action
relating to Borrower under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statue
of any jurisdiction, whether now or hereafter in effect, or if
there is commenced against Borrower any such action, or
Borrower by any act indicates its consent to or approval of
any trustee for Borrower
Loan Agreement/Page 5 of 8
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of any substantial part of its property, or suffers any such
receivership or trustee to continue undischarged;
then upon the happening of any of the foregoing events of default which shall
be continuing, the Note shall become and be immediately due and payable upon
declaration to that effect by Lender.
6. MISCELLANEOUS.
A. DEFINITIONS. In addition to any other terms defined herein,
the term, "Loan Documents", means this Loan Agreement and any
and all promissory notes executed by Borrower in favor of
Lender and all other documents, instruments, guarantees,
certificates and agreements executed and/or delivered by
Borrower, any guarantor or third party in connection with any
Loan.
B. EXPENSES. Borrower shall pay to Lender immediately upon
demand the full amount of all costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees
and all allocated costs of Lender's in-house counsel if
permitted by applicable law), incurred by Lender in connection
with (a) negotiation and preparation of this Agreement and
each of the Loan Documents, and (b) Lender's continued
administration thereof. Borrower also agrees to pay all
out-of-pocket expenses of Lender in connection with the
collection of the Note.
C. DOCUMENTS. All documents, certificates and other items
required under this Loan Agreement to be executed and/or
delivered to Lender shall be in form and content satisfactory
to Lender and its counsel.
D. CUMULATIVE RIGHTS AND WAIVERS. Each and every right granted
to Lender hereunder or under any other document delivered
hereunder or in connection herewith, or allowed it by law or
equity shall be cumulative of, and may be exercised in
addition to, any and all other rights of Lender, and no delay
in exercising any right shall operate as a waiver thereof, or
shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise
of any other right. Any of the foregoing covenants and
agreements may be waived by lender but only in writing signed
by a Vice President or higher level officer of Lender.
Borrower expressly waives any presentment, demand, protest or
other notice of any kind. No notice to or demand on Borrower
in any case shall, of itself, entitle Borrower to any other or
further notice of demand in similar or other circumstances.
No delay or omission by Lender in exercising any power or
right hereunder shall impair any such right or power or be
construed as a waiver thereof or any acquiescence therein, nor
shall any single or partial exercise of any such power
preclude other or further exercise thereof, or the exercise of
any other right or power hereunder.
Loan Agreement/Page 6 of 8
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E. INDEMNIFICATION. The Borrower agrees to indemnify, defend and
hold Lender harmless from and against any and all loss,
liability, obligation, damage, penalty, judgment, claim,
deficiency and expense (including interest, penalties,
attorneys' fees and amounts paid in settlement) to which the
Lender may become subject arising out of or based upon the
Loan Documents, or any Loan, including that resulting from
Lender's own negligence, except and to the extent caused by
Lender's gross negligence or willful misconduct. The
Borrower's obligations under this paragraph shall survive the
repayment of the Loan.
F. ASSURANCES. Borrower agrees to promptly execute and deliver
any and all further agreements, documents, instruments, and
other writings that Lender may request to cure any defect in
the execution and delivery of any Loan Document or more fully
to describe particular aspects of the agreements set forth or
intended to be set forth in the Loan Documents.
G. NOTICES. All notices required under the Loan Documents shall
be in writing and either delivered against receipt therefor,
or mailed by registered or certified mail, return receipt
requested, in each case addressed to the address shown on the
first page of this Agreement or to such other address as
either Borrower or Lender may designate. Notices shall be
deemed to have been given (whether actually received or not)
when delivered (or, if mailed, on the next Business Day).
H. APPLICABLE LAW. This Agreement and the rights and obligations
of the parties hereunder shall be governed by and interpreted
in accordance with the laws of the State of Texas.
I. AMENDMENT. No modification, consent, amendment or wavier of
any provision of this Agreement, nor consent to any departure
by Borrower therefrom, shall be effective unless the same
shall be in writing and signed by an authorized officer of
Lender, and then shall be effective only in the specific
instance and for the purpose for which given. This Agreement
is binding upon Borrower, its successors and assigns, and
inures to be benefit of Lender, its successors and assigns.
J. MULTIPLE COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and each counterpart when so executed
and delivered shall constitute an original hereof, but all
such separate counterparts shall constitute one and the same
instrument.
K. SEVERABILITY OF PROVISIONS. In case one or more provisions of
this Agreement shall be invalid, illegal or unenforceable in
any respect under applicable law, the validity, legality and
enforceability of the remaining provisions contained herein
shall not be affected or impaired.
Loan Agreement/Page 7 of 8
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
BIT GROUP SERVICES, INC. BIT INVESTORS, LLC
By: /s/ XXXXXXXX X. XXXX By: /s/ XXXXXX X. XXXXXXX
----------------------------- ----------------------------------
Xxxxxxxx X. Xxxx Xxxxxx X. Xxxxxxx
President Manager
Loan Agreement/Page 8 of 8
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EXHIBIT "A"
Form of Promissory Note
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THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY
LAWS (COLLECTIVELY, THE "ACTS"), AND NO SUCH REGISTRATION IS CONTEMPLATED. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL. IN THE ABSENCE OF ANY EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACTS, THIS PROMISSORY NOTE MAY NOT BE OFFERED,
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACTS.
REVOLVING CREDIT NOTE NOT UNDER
CHAPTER 15
$1,800,000 Houston, Texas October 16, 1997
BIT GROUP SERVICES, INC.("Borrower"), for value received, promises to
pay to the order of BIT INVESTORS, L.L.C. (hereinafter called "Lender"), on or
before the earlier to occur of (i) June 1, 1998, or (ii) 30 days following the
successful completion of Borrower's proposed IPO as defined in the Loan
Agreement as referenced below, at its main business office in Houston, Texas,
in lawful money of the United States of America, ONE HUNDRED TWENTY-NINE
THOUSAND SEVEN HUNDRED NINETY-SIX AND EIGHTY-FOUR HUNDREDTHS DOLLARS
($129,796.84), being the outstanding principal balance owing to Lender by
Borrower as of the date hereof, together with such sums as the holder hereof
may loan or advance to or for the benefit of Borrower on or after the date
hereof in accordance with the terms hereof, together with interest on the
unpaid principal balance outstanding from time to time hereon computed from the
date of each advance until maturity at the rate of ten percent (10%) per annum.
Interest shall be calculated on a per annum basis of 360 days unless such
calculation would result in a usurious rate, in which event, interest shall be
calculated on a full calendar year basis.
THE UNPAID principal balance hereof shall, including the principal
amount outstanding as of the date hereof, shall at no time exceed the sum of
ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000).
INTEREST on this note is payable in installments of accrued interest
which shall be due and payable quarterly so long as any principal of this note
is unpaid, commencing on the 1st day of June, 1998, and thereafter on the same
day of each consecutive September, December, March and June during the term
hereof and at maturity.
Page 1 of 5 page Promissory Note
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IF ANY PAYMENT of principal or interest on this note shall become due
on a Saturday, Sunday, or public holiday under the laws of the State of Texas,
such payment shall be made on the next succeeding business day of Lender,
unless the effect of such extension would be to carry the payment over to the
next calendar month, in which event such payment shall be due on the preceding
business day of Lender, and any such extension or reduction of time shall in
such case be included in computing interest in connection with such payment.
PAYMENT of this note before maturity may be made at any time or from
time to time, in whole or in part, without penalty or premium. Any such
payment shall be applied first to accrued interest and secondly to principal.
THE UNPAID PRINCIPAL BALANCE of this note at any time shall be the
total amounts lent or advanced hereunder by the holder hereof, less the amount
of payments or prepayments of principal made hereon by or for the account of
Borrower. Borrower may borrow, repay and reborrow funds under this revolving
promissory note and there is no limit on the number of advances against this
note so long as the total unpaid principal at any time outstanding does not
exceed face amount of the note. It is contemplated that by reason of
prepayments hereon there may be times when no indebtedness is owing hereunder;
but notwithstanding such occurrences, this note shall remain valid and shall be
in full force and effect as to loans or advances made pursuant to and under the
terms of this note subsequent to each occurrence. All loans or advances and
all payments or prepayments made hereunder on account of principal or interest
may be endorsed by the holder hereof on the Schedule attached hereto and made a
part hereof for all purposes. Additional Schedule pages may be attached hereto
from time to time by the holder hereof if more space is necessary. The amounts
of the advances and payments recorded by Lender on the reverse hereof or on
such schedule shall be binding upon Borrower as to the amount owed by Borrower.
This Note may be paid in full from time to time, but shall nevertheless remain
in full force and effect to evidence any advances made under such revolving
line of credit after any such payment in full. Borrower hereby authorizes the
holder hereof to endorse on the Schedule attached to this Note or any
continuation thereof, all advances made to Borrower hereunder and all payments
made on account of the principal thereof, which endorsements shall be prima
facie evidence as to the outstanding principal amount of this Note; provided,
however, any failure by the holder hereof to make any endorsement shall not
limit or otherwise affect the obligations of Borrower under this Note.
ADVANCES hereunder may be made by the holder hereof at the oral or
written request of any of the undersigned or of any officer or agent of
Borrower designated by or acting under the authority of resolutions of the
Board of Directors of Borrower, a duly certified or executed copy of which
shall be furnished to the holder hereof, until written notice of the revocation
of such authority is received by the holder hereof. Borrower agrees to furnish
to the holder hereof written confirmation of any such oral request within five
(5)
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days of the resulting loan or advance, but any such loan or advance shall be
deemed to be made under and entitled to the benefits of this note irrespective
of any failure by Borrower to furnish such written confirmation.
IF ANY installment of principal and/or interest on this note is not
paid when due; or if Borrower or any drawer, acceptor, endorser, guarantor,
surety, accommodation party or other person liable upon or for payment of this
note (each hereinafter called an "other liable party"), shall die, or become
insolvent (however such insolvency may be evidenced); or if Borrower or any
partnership of which Borrower is a member shall suspend the transaction of his,
its or their usual business, or be expelled from or suspended by any stock or
securities exchange or other exchange; or if any proceeding, procedure or
remedy supplementary to or in enforcement of judgment shall be resorted to or
commenced against, or with respect to any property of, Borrower or other liable
party; or if a petition in Bankruptcy or for any relief under any law relating
to the relief of debtors, re-adjustment of indebtedness, re-organization,
composition or arrangement shall be filed, or any proceedings shall be
instituted under any such law, by or against Borrower or any such partnership
or other liable party; or if any governmental authority or any court at the
instance thereof shall take possession of any substantial part of the property
of, or assume control over the affairs or operations of, or a receiver shall be
appointed of the property of, or a writ or order of attachment or garnishment
shall be issued or made against any of the property of, Borrower or any such
partnership or other liable party; or if any indebtedness of Borrower or of any
such partnership or of other liable party for borrowed money shall become due
and payable by acceleration of maturity thereof; or if Borrower or any such
partnership or other liable party ceases to generally pay his or its debts as
they become due; or if Borrower (if a corporation) shall be dissolved or be a
party to any merger or consolidation without the written consent of Lender; or
if Borrower or other liable party fails to furnish financial information
requested by Lender; or if a default occurs under any instrument now or
hereafter executed in connection with or as security for this note; thereupon,
at the option of Lender, this note and any and all other indebtedness of
Borrower to Lender shall become and be due and payable forthwith without
demand, notice of nonpayment, presentment, protest or notice of dishonor, all
of which are hereby expressly waived by Borrower and each other liable party.
IF THIS NOTE is not paid at maturity whether by acceleration or
otherwise and is placed in the hands of an attorney for collection, or suit is
filed hereon, or proceedings are had in probate, bankruptcy, receivership, re-
organization, arrangement or other legal proceedings for collection hereof,
Borrower and each other liable party agree to pay Lender a reasonable amount as
attorney's fees which is agreed to be an additional amount equal to ten percent
of the unpaid principal and interest hereof. Borrower and each other liable
party are and shall be directly and primarily, jointly and severally, liable
for the payment of all sums called for hereunder, and Borrower and each other
liable party hereby expressly waive demand, notice of nonpayment, presentment,
protest, notice of dishonor, bringing of suit and
Page 3 of 5 page Promissory Note
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diligence in taking any action to collect any sums owing hereon and in the
handling of any security, and Borrower and each other liable party hereby agree
to any and all renewals, extensions for any period, rearrangements and/or
partial prepayments hereon and to any release or substitution of security, in
whole or in part, with or without notice, before or after maturity. Borrower
and each other liable party also waive, to the full extent permitted by law,
all right to plead any statute of limitation as a defense to any action
hereunder.
IT IS the intention of Borrower and Lender to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the State of
Texas and the laws of the United States of America), then, in that event,
notwithstanding anything to the contrary in any agreement entered into in
connection with or as security for this note, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is taken, reserved, contracted for, charged or received under this note or
under any of the other aforesaid agreements or otherwise in connection with
this note shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be credited on the note by the
holder hereof (or, if this note shall have been paid in full, refunded to the
Borrower); and (ii) in the event that maturity of this note is accelerated by
reason of an election by the holder hereof resulting from any default hereunder
or otherwise, or in the event of any required or permitted prepayment, then
such consideration that constitutes interest may never include more than the
maximum amount allowed by applicable law, and excess interest, if any, provided
for in this note or otherwise shall be canceled automatically as of the date of
such acceleration or prepayment and, if theretofore prepaid, shall be credited
on this note (or if this note shall have been paid in full, refunded to the
Borrower).
THIS NOTE is the promissory note referred to in that certain Loan
Agreement of even date herewith by and between the Borrower and Lender (the
"Loan Agreement"), reference to which Loan Agreement is hereby made for all
purposes, and as such, this Note is made and delivered thereunder and is
entitled to the benefits of and is governed by such Loan Agreement. Among
other things, the Loan Agreement contains certain events of default and
provisions for mandatory prepayments. Capitalized terms used but not defined
herein shall have the meanings assigned to them in the Loan Agreement. A
default under the terms and conditions of said Loan Agreement shall constitute
default under the terms of this Note, and all other instruments or documents
securing this Note or executed in connection therewith.
THIS NOTE has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the
United States of America except that Tex. Rev. Civ. Stat. Xxx. art. 0000 Xx.
15, as amended (which regulates certain revolving credit loan accounts and
revolving triparty accounts) shall not apply to the
Page 4 of 5 page Promissory Note
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revolving loan account created pursuant hereto. Unless changed in accordance
with law, the applicable rate ceiling under Texas law shall be the indicated
(weekly) rate ceiling as provided in Tex. Rev. Civ. Stat. Xxx. art. 5069-1.04,
as amended.
EXECUTED, by its duly authorized representative, effective as of
October 16, 1997.
BIT GROUP SERVICES, INC.
By:
-------------------------------------
Xxxxxxxx X. Xxxx
President
Page 5 of 5 page Promissory Note
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SCHEDULE
OF
ADVANCES AND PAYMENTS OF PRINCIPAL AND INTEREST
--------------------------------------------------------------------------------
Outstanding
Principal
Balance of
Amount Amount of Amount of Loan
of Principal Interest Following Notation
Date Advance Paid Paid Payment Made By
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