Exhibit 10.4 M & T Bank $25,000 note due December 24, 2005
M&T BANK
Manufactures and Traders Trust Company
BUSINESS INSTALLMENT NOTE
AND SECURITY AGREEMENT
NEW YORK
Date: February 22, 2001 Principal Amount: $25,000.00
Borrower: ROCHESTER PORTABLE SPECIALTIES, INC. dba Crescent Moon
Chief Executive Office: 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000
Bank: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with the principal banking office at: Xxx X & X Xxxxx, Xxxxxxx, Xxx Xxxx
00000
1. PROMISE TO PAY. For value received, Borrower agrees to all the provisions
herein and promises to pay to the order of the Bank, the entire principal amount
stated above (the "Principal") in 60 (or more) monthly installments of principal
and interest in the amount of $531.31 as stated in Section 3 and all fees and
costs (including without limitations attorneys' fees and disbursements whether
for internal or outside counsel) the Bank incurs in order to collect any amount
due under this Note or any mortgage or other collateral securing this Note, to
negotiate or document a workout or restructuring, or to preserve its rights or
realize upon any guaranty or other security for the payment of this Note
("Expenses"). Payments must be made in immediately available United States funds
at any banking office of the Bank or by mail to the address stated on the
coupons issued in connection with this Note. Payments may be applied in any
order at the sole discretion of the Bank, and the Bank reserves its right to
deduct Expenses and fees incurred by Borrower before applying any payment to
interest and Principal of this loan ("Loan").
2. COLLATERAL. To secure the Obligations (defined below), Borrower grants to the
Bank a Security interest in the Collateral, which means all property of
Borrower, wherever located and whether now owned or hereafter owned or acquired
by Borrower, whether or not affixed to realty, in all proceeds and products
thereof in any form, including without limitation all goods, fixtures, accounts,
inventory, farm products, equipment, investment property, chattel paper, general
intangibles, instruments, commercial paper, documents, deposit accounts and
money in the actual or constructive possession of the Bank or its Affiliates
(defined below), whether for security, safekeeping, collection or any other
purpose.
Borrower acknowledges and agrees that, in applying the law of any jurisdiction
that at any time enacts all or substantially all of the uniform provisions of
Revised Article 9 of the Uniform Commercial Code (1999 Official Text), the
foregoing collateral description covers all assets of Borrower.
Each security interest granted hereunder is unconditional, independent of and in
addition to all other security, shall continue until each of the Obligations is
irrevocably paid, and shall be reinstated if any of the Obligations is
reinstated.
3. INTEREST RATE AND NUMBER OF PAYMENTS.
a. Interest. The unpaid Principal of this Note shall earn interest
calculated on the basis of a 365-day year for the actual number of days of
each year (365 or 366) from and including the date the proceeds of this
Note were disbursed to, but not including, the date all amounts hereunder
are paid in full at a variable (adjustable) annual interest rate which
shall, during each calendar quarter, equal the sum of 1.5 percentage points
(the "Margin Rate") plus the highest prime rate published in The Wall
Street Journal in its table entitled "Money Rates" as in effect on the last
business day of the second month of the preceding calendar quarter (the
"WSJ Prime Rate"). The Bank may provide Borrower with notice of each
adjustment in the WSJ Prime Rate which results in a change in the
applicable rate under this Note. It is the intent of the Bank and Borrower
that in no event shall interest by payable at a rate in excess of the
maximum rate permitted by applicable law (the "Maximum Legal Rate"). If an
Event of Default (defined below) occurs, the interest rate on the unpaid
Principal shall immediately be automatically increased to 5 percentage
points per year above the otherwise applicable rate per year, and any
judgment entered hereon or otherwise in connection with any suit to collect
amounts due hereunder shall bear interest at such Default Rate. Solely to
the extent necessary to prevent interest under this Note from Exceeding the
Maximum Legal Rate, any amount that would be treated as excessive under a
final judicial interpretation of applicable law shall be deemed to have
been a mistake and automatically canceled, and, if received by the Bank,
shall be refunded to the Borrower.
b. Increase in Number of Monthly Installments. Interest will accrue on each
day until payment is actually received by the Bank. IF PAYMENTS ARE
RECEIVED AFTER THE DUE DATE, OR IF THE APPLICABLE INTEREST RATE INCREASES
BECAUSE OF AN INCREASE IN THE WSJ PRIME RATE, more interest will be payable
than when the number of payments was initially determined; and THE NUMBER
OF PAYMENTS WILL BE INCREASED to allow for payment of all principal and
interest which become due for this Loan, delaying the maturity of this
Note. Each quarterly adjustment notice will state the remaining principal
balance as of the notice date.
c. Late Charge. If payment is not received within ten (10) days of the due
date, Borrower shall pay a late chare equal to 5% of the delinquent amount;
provided, however, that if this Note is primarily secured by a mortgage on
an owner-occupied residence, the grace period shall be fifteen (15) days
and the late charge equal to 2% of the delinquent amount.
d. Prepayment Premium. Borrower shall have the option of paying the entire
outstanding Principal balance under this Note, or part thereof, at any time
upon written notice received by the Bank at least three (3) business days
prior to making such payment; provided, however, that (unless this Note is
secured primarily by a mortgage on an owner-occupied residence) together
with such prepayment, Borrower shall pay to the Bank a premium equal to 5%
of the Principal amount prepaid. Upon making any prepayment of the entire
outstanding Obligations, Borrower shall pay to the Bank all interest and
Expenses owing pursuant to this Note and remaining unpaid. In the event the
maturity of this Note is accelerated following an Event of Default and
tender of payment of the amount necessary to satisfy the entire Obligations
made after such Event of Default shall be expressly deemed a voluntary
prepayment. In such a case, to the extent permitted by law, the Bank shall
be entitled to the amount necessary to satisfy the entire Obligations, plus
the appropriate prepayment premium calculated in accordance with this
paragraph.
4. DEFINITIONS. All terms, unless otherwise defined in this Note, shall have the
meanings assigned in the Uniform Commercial Code as may be in effect in the
State of New York as amended from time to time ("UCC"). "Deposit Account" means
each deposit account, share, certificate of deposit, other instrument and other
records or form of deposit evidencing such an account of Borrower at any time
and from time to time maintained with the Bank, any affiliate or subsidiary of
the Bank ("Affiliate"), or other financial institution whether or not listed on
this Note or any schedule hereto together with (i) all interest and all profits,
whether now accrued or hereafter accruing, (ii) all additional deposits or
credits hereafter made to the Deposit Account, (iii) any and all proceeds from
the Deposit Account and (iv) all renewals, replacements and substitutions for
any of the foregoing. A Deposit Account may be, but is not necessarily,
evidenced by a certificate or passbook and may include demand deposits, time
deposits, savings accounts, shares in pooled funds, holding accounts, sweep
accounts, money market accounts, Eurodollar accounts or any other form of
deposit. "Depository" means any financial institution or entity holding a
Deposit Account. "Event of Default" means (i) failure by Borrower to make any
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations, or any part thereof, or there occurs any event or condition
which, after notice, lapse of time or both will permit such acceleration; (ii)
Borrower defaults in the performance of any covenant or other provision with
respect to this Note, the Obligations or any other agreement between Borrower
and the Bank or its Affiliate; (iii) Borrower fails to pay when due (whether at
the stated maturity, by acceleration or otherwise) any indebtedness for borrowed
money owing to any third party or any Affiliate, the occurrence of any event
which could result in acceleration of payment of any such indebtedness or the
failure to perform any agreement with any third party of any Affiliate; (iv) the
reorganization, merger, consolidation or dissolution of Borrower (or the making
of any agreement thereof), the sale, assignment, transfer or delivery of all or
substantially all of the assets of Borrower, to a third party, or the cessation
by Borrower as a going business concern: (v) the death or judicial declaration
of incompetency of Borrower, if an individual: (vi) failure to pay, withhold or
collect any tax as required by law; the service or filing against Borrower or
any of its assets of any lien (other than a Permitted Lien), judgment,
garnishment, order or award: (vii) if Borrower becomes insolvent or is generally
not paying its debts as such debts become due; (viii) the making of any general
assignment by Borrower for the benefit of creditors: the appointment of a
receiver or similar trustee for Borrower or its assets; or the making of any, or
sending notice of any intended bulk sale: (ix) Borrower commences, or has
commenced against it, any proceeding or request for relief under any bankruptcy,
insolvency or similar laws now or hereafter in effect in the United States of
America or any state or territory thereof or any foreign jurisdiction or any
formal or informal proceeding for the dissolution or liquidation of, settlement
of claims against or winding up of affairs of Borrower; (x) any representation
or warranty made in this Note, any related document, any agreement between
Borrower and the Bank or any Affiliate or in any financial statement of Borrower
proves to have been misleading in any material respect when made; Borrower omits
to state a material fact necessary to make the statements made in this Note, any
related document, any agreement between Borrower and the Bank or any Affiliate
or any financial statement of Borrower not misleading in light of the
circumstances in which they were made; or, if upon the date of execution of this
Note, there shall have been any materially adverse change in any of the facts
disclosed in any financial statement, representation or warranty that was not
disclosed in writing the Bank at or prior to the time of execution hereof; (xi)
any pension plan of Borrower fails to comply with applicable law or has vested
unfunded liabilities that, in the opinion of the Bank, might have a material
adverse effect on Borrower's ability to repay its debts; (xii) the occurrence of
any event described in sub-paragraphs(i) through the including (xi) hereof with
respect with to Borrower or to any endorser, guarantor or any other party liable
for or whose assets or any interest therein secures payment or any of the
Obligations (a "Guarantor"); or (xiii) the Bank in good xxxxx xxxxx itself
insecure with respect to payment or performance of the Obligations. "Note" means
this Business Installment Note and Security Agreement, as it may be amended,
modified, refinanced, replaced, renewed or substituted from time to time.
"Obligations" means, collectively, (i) the obligations to pay the Principal,
Interest, Expenses and any other amount under this Note and any other
indebtedness and obligations for the payment of money now existing or hereafter
arising, direct and indirect, absolute and contingent (including without
limitation those arising by operation of law), due or to become due, contractual
or tortuous, liquidated or unliquidated, now or hereafter owing by Borrower to
the Bank or its successor or assign or any holder of this Note, whether or not
allowed as a claim against Borrower in bankruptcy, (ii) all extensions,
renewals, refinances, modifications and replacements and all interest and
related charges, and (iii) reinstated Obligations. "Permitted Lien" means the
security interest granted herein and any security interest in or other
encumbrance on the Collateral listed on an attached Schedule titled "Permitted
Liens"; any lien for property taxes not yet due.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. Borrower represents, warrants and
covenants to the Bank that now and until all Obligations are paid in full as
follows: The Loan proceeds shall be used only for a business purpose and not for
any personal, family or household purpose. Borrower is an entity or a sole
proprietor (i) duly organized and existing and in good standing under the laws
of the jurisdiction in which it was formed, (ii) duty qualified and authorized
to do business in every jurisdiction in which failure to be so qualified might
have a material adverse effect on its business or assets and (iii) has the power
and authority to own each of its assets and to use them as contemplated now or
in the future. The execution and delivery to the Bank of this Note (i) are in
furtherance of Borrower's purposes and within its power and authority; (ii) do
not violate (A) any law or judgment or order or court or other governmental
authority or of any arbitrator or (B) Borrower's governing documents, constitute
a default under any agreement binding on Borrower, or result in a lien on any
assets of Borrower (other than the security interest granted hereunder); and
(iii) have been duly authorized by all necessary corporate, partnership or
limited liability company or partnership actions. Borrower conducts its business
and operations and the ownership of its assets in compliance with each
applicable statute, regulation and other law, including, without limitation,
environmental laws. All approvals, including without limitation, permits
licenses, registrations, and notices (the "Approvals") necessary to the conduct
of Borrower's business and for Borrower's due issuance of this Note have been
duly obtained and are in full force and effect without default by Borrower.
Until the Obligations are paid in full, Borrower shall provide to the Bank upon
requests in form and number of copies and by accountants satisfactory to the
Bank, within 90 days after the end of each fiscal year of Borrower, statements
of income and cash flows and the financial position and balance sheet of
Borrower as to the fiscal year end, each in reasonable detail and certified by
an officer or member of Borrower to have been prepared in accordance with
generality accepted accounting principles to present fairly the results of
Borrower's operations and cash flows and its financial position in conformity
with such principles, and to be correct, complete and in accordance with
Borrower's records. Promptly upon the request of the Bank from time to time.
Borrowers shall supply all additional information requested and shall permit the
Bank and its agents to (A) visit and inspect each of Borrower's premises and the
Collateral. (B) examine, audit, copy, and extract from Borrower's records and
(C) discuss Borrower's or its affiliates business, operations, assets or
condition (financial or other) with its responsible officers and independent
accountants. That (i) Borrower has assessed its equipment (including, embedded
systems), software, firmware and computer systems (including equipment or
systems supplied by others or with which Borrower's equipment and systems,
exchange date data) that are material to Borrower conducting its business and/or
performing operations (collectively, the "Systems") to determine whether such
Systems accurately process date data from, into, and between the twentieth and
twenty-first centuries, including leap year calculations ("Y2K Compliant"); (ii)
in sufficient time before December 31, 1999, Borrower will have corrected and
redeployed any non-Y2K Compliant Systems so that all its Systems are Y2K
Compliant and all Systems will have been tested to confirm that they are
Y2KCompliant; and (iii)the expense of correcting and redeploying any non-Y2K
Compliant Systems and all system testing, and/or the reasonably foreseeable
consequence of any system failing to be Y2K Compliant will not have material
adverse effect on Borrower. Upon the Bank's request, Borrower shall provide the
Bank with updates on the status of its System's Year 2000 readiness. Borrower
will maintain a system of accounting and reserves in accordance with generality
accepted accounting principles, has filed and will file each tax return required
of it and, except as disclosed in an attached schedule, has paid and will pay
when due such tax, assessment fee and penalty imposed by any taxing authority
upon Borrower or any of its assets or income, as well as all accounts owed to
mechanics, materialmen, landlords, suppliers and the like in the ordinary course
of business. Borrower has good and marketable title to the Collateral free of
security interests or other liens except for Permitted Liens. There is no
pending or threatened claim, investigation or other legal proceeding or judgment
or order of any court or other governmental authority or arbitrator (each an
"Action") which involves Borrower or its assets and might have a material
adverse effect upon Borrower or threaten the validity of this Note, the
Collateral or any related document or transaction. Borrower will immediately
notify the Bank in writing upon acquiring knowledge of any such Action. Borrower
will immediately notify the Bank in writing (i) of any change in its address;
(ii) of the occurrence of any Event of Default, (iii) of any material change in
Borrower's ownership or management; and (iv) of any material adverse change in
Borrower's ability to repay this Note. Until the Obligations are paid in full,
Borrower shall not without the prior written consent of the Bank (i) sale or
otherwise dispose of substantially all of it s assets; (ii) acquire
substantially all of the assets of another entity; (iii) participate in any
merger, consolidation or other absorption; or (iv) agree to do any of these
things. Borrower will defend the Collateral against any demand, claim,
counterclaim, setoff and defense asserted by any person or entity (other than
the Bank or its Affiliates) and shall immediately notify the Bank, if such are
made.
6. MAINTENANCE OF CASUALTY INSURANCE. Borrower shall procure and maintain all
risks insurance, including without limitation fire, theft, and liability
coverage together with such other insurance as the Bank may require with respect
to the Collateral, in form, amounts, coverages and basis reasonably acceptable
to the Bank and issued by a company or companies reasonably acceptable to the
Bank. Borrower, upon request of the Bank, will deliver to the Bank from time to
time the policies or certificates of insurance in form satisfactory to the Bank,
including stipulations that coverages will not be canceled or diminished without
at least thirty (30) days prior written notice to the Bank and not including any
disclaimer of the insurer's liability for failure to give such a notice and
endorsement naming the Bank as lender loss payable or other endorsements as the
Bank may require. If Borrower at any time fails to obtain or maintain any
insurance as required under this Note, the Bank may, (but shall not be obligated
to) obtain such insurance as the Bank deems appropriate, including if it so
chooses "single interest insurance", which will cover only the Banks' interest
in the Collateral. Borrower, upon request of the Bank, shall furnish to the Bank
reports on each existing policy of insurance showing such information as the
Bank may reasonably request including the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy; (d) the property
insured; (e) the then current value on the basis of which insurance has been
obtained and the manner of determining that value; and (f) the expiration date
of the policy. In addition, Borrower shall upon request by the Bank (however not
more than annually) have an independent appraiser satisfactory to the Bank
determine, as applicable, the cash value or replacement cost of the Collateral.
7. COLLATERAL. Borrower, upon the request of the Bank, will deliver to the Bank
in form satisfactory to the Bank a schedule of real properties and Collateral
locations relating to the Borrower's operations and the name and address of any
landlord or mortgagee for that real property. Upon request, Borrower will
promptly obtain the Bank's standard form of waiver signed by each landlord,
mortgagee and owner or real property to which Collateral is or becomes affixed
or on which the Collateral is located and/or Borrower's records are maintained.
Borrower will not relocate any goods included in the collateral without the
prior written consent of the Bank. Each account, chattel paper and general
intangible is genuine and is enforceable in accordance with its terms against
the respective account without any counterclaim, setoff or defense. Borrower
will promptly notify the Bank of any failure of any person to perform any
obligation relating to any account, chattel paper, general intangible,
instrument or document. Borrower will inform the Bank if any account or general
intangible is derived from a federal contract and will promptly execute and
deliver each writing, and take each other action that the Bank deems desirable
to allow the Bank to enforce its rights under then federal Assignment of Claims
Act. Borrower will maintain a perpetual inventory record if requested by the
Bank. Borrower will not abandon, sell, lease, exchange or otherwise transfer or
dispose of any part or interest in the collateral, provided, however, that until
an Event of Default has occurred or the Bank has sent notice to the contrary,
Borrower may do the following pursuant to applicable law and in the ordinary
course of business; (A) dispose of any obsolete or worn out equipment or
exchange any equipment for other equipment of at least equal value to be used
for substantially the same purpose; (B) assign any account for purposes of
collection; or (C) sell or otherwise dispose of any inventory or farm product.
8. PERFECTION OF SECURITY INTEREST, POWER OF ATTORNEY. Borrower shall execute
such financing statements or other agreements and take whatever actions are
requested by the Bank to perfect and continue the Bank's security interest in
the Collateral including entering into control agreements with any security
intermediary that holds any investment property in a security account. Upon the
Bank's request, Borrower shall deliver to the Bank any and all of the documents,
or instruments evidencing the Collateral and Borrower shall note the Banks'
interest upon any and all chattel paper if not delivered to the Bank for
possession by the Bank. Borrower irrevocably and unconditionally appoints the
Bank as its attorney-in-fact with full power of substitution to perform each of
Borrower's obligations under this Note including, security interest granted by
this Note and protect its interest in the collateral (whether or not an Event of
Default has occurred). This power of attorney is coupled with an interest and
shall not be terminated by the death, disability, or incompetence of Borrower.
Borrower hereby revokes every inconsistent power of attorney, proxy and
authorization granted by Borrower to any other person. The Bank may from time to
time without limitation (but is not obligated to) endorse or execute in its own
or borrower's name and deliver all financing statements, control agreements (for
the purpose of granting the Bank control (as defined in UCC Section 8-108) over
investment property held in a securities account with securities intermediary or
issued by and issuer), open any mail addressed to Borrower, retain any
enclosure, purchase insurance coverage and endorse insurance payments. The Bank
may at any time, and without further authorization from Borrower, file a copy of
any financing statement or this Note for use as a financing statement. Borrower
will reimburse the Bank all Expenses for the perfection and continuation of the
perfection of the Banks' security interest in the Collateral. Borrower will
obtain from each Depositary or issuer of life insurance collateral
acknowledgment of receipt of notice of assignment for each Deposit Account or
life insurance policy, respectively, which has been assigned to the Bank.
9. EARNINGS OF THE COLLATERAL. Any and all replacement or renewal certificates,
Investment properties, instruments or other benefits in proceeds related to the
Collateral that are received by Borrower, they shall be held by Borrower in
trust for the Bank and immediately shall be delivered by Borrower to the Bank to
be held as part of the Collateral. With respect to chattel paper and accounts,
borrower agrees upon the request of the Bank (a) to direct each account debtor
or lessee to make payments directly to the Bank and (b) to execute all notices,
lockbox agreements and similar documents requested by the Bank to affect such
payment. Whether or not an Event of Default has occurred, Borrower authorizes
the Bank: (i) to receive any increase in or profits on the collateral
(including, without limitation, any stock issued as a result of any stock split
or dividend, any capital distribution and the like), and to hold the same as
part of the Collateral; and (ii) to receive any payment or distribution on the
collateral upon redemption by, or dissolution and liquidation of, the issuer, to
surrender such collateral or any part thereof in exchange thereof; and to hold
the net cash receipts from any such payment or distribution as part of the
collateral. If Borrower receives any such increase, profits, payments or
distributions, Borrower will receive and deliver same promptly to the Bank on
the same terms and conditions set forth above respecting cash income or interest
after and Event of Default, to be held by the Bank as part of the Collateral.
10. REMEDIES UPON DEFAULT. The Bank has all of the rights and remedies of a
secured party under the UCC and other applicable law as well as those specified
in this Note. In addition and without limitation, the Bank may exercise one or
more of the following rights or remedies or any other right or remedy set forth
in this Note at any time and from time to time after the occurrence of any Event
of Default. Automatically upon commencement of Borrower's bankruptcy, and at the
Bank's option upon any other Event of Default, all of the Obligations shall
immediately become due and payable, without notice, demand, presentation or
protest of any kind. Nothing in this Note shall render any portion of the
Obligations which is payable on demand to be payable otherwise than on demand or
shall in any other way impair any right or remedy of the bank with respect to
the Obligations or the Collateral. The Bank may demand, transfer, liquidate and
realize upon its interest in all or any portion of the Collateral, without
regard to any resulting early-withdrawal or other penalty and may enforce,
compromise, settle or discharge any of the Collateral without discharging the
Obligations or any part thereof. No such penalty shall cause the Bank's
disposition of the Collateral to be deemed not to have been commercially
reasonable. Promptly upon the Bank's request, Borrower will assemble all goods
and make them available to the Bank or Borrower's premises or at other places
designated by the Bank. The Bank shall have the right to enter and remain on
Borrower's premises without judicial process and to use Borrower's equipment in
order to complete any work in process and prepare any Collateral for sale, lease
or other disposition. In the exercise of its rights as secured party, the Bank
has a license to use, without compensation of any kind, each trademark, service
xxxx, trade name, patent, copyright, license, franchise and similar general
intangible to the extent of Borrower's rights in the Collateral. Upon Borrower's
failure to perform any of its duties hereunder, the Bank may, but shall not be
obligated to perform any or all such duties and Borrower shall pay an amount
equal to the cost thereof to the Bank on demand by the Bank. Payment of all
monies hereunder shall be secured by the Collateral. After an Event of Default
has occurred, or if the Bank so notified Borrower, Borrower will not, without
the Bank's prior written consent, enforce, settle, compromise, release,
discharge, commence, waive any right or remedy relating to or otherwise impair
or affect any indebtedness, liability or obligation of any account debtor or
other person relating to any account, chattel paper, general intangible or
instrument. The Bank shall have the right to setoff against the Obligations,
without notice or demand, any Deposit Account or other monies or property owing
by the Bank or any Affiliate in any capacity to Borrower or any Guarantor in any
capacity whether or not the obligation to pay such monies owed by the Bank or
Affiliate is then due, and the Bank or Affiliate shall be deemed to have
exercised such right of setoff immediately at the time of such election even
though any charge therefore is made or entered on the records subsequent
thereto. Any commitment of the Bank to grant any financial accommodation to
Borrower will terminate. Borrower will remain liable for any deficiency.
Surplus, if any, will be remitted to Borrower or on Borrower's account.
11. STANDARD OF CARE. The Bank shall have only such duties of custody and due
care of the Collateral as provided by the UCC. The Bank shall be deemed to have
exercised reasonable care if the Bank affords the collateral treatment
substantially equal to the treatment the Bank accords its own assets of a
similar nature. The Bank has no duty to (a) preserve any right or remedy of
Borrower against any Depositary, issuer, securities intermediary or account
debtor, or any and all prior parties to any instrument or chattel paper
constituting Collateral whether or not in Bank's possession, (b) ascertain,
provide notice of any maturity, call, or similar matter, or (c) provide to
Borrower any proxy statement or other communication received by the Bank or its
nominee. The Bank shall not be liable to Borrower for loss or damage resulting
from the Bank's failure to enforce or collect on such Collateral or to collect
any money due or to become due thereunder.
12. REINSTATED OBLIGATIONS. The obligations secured by the Collateral include
without limitation any payments recovered from the Bank such as sums claimed as
impermissible setoffs, trust funds or as a preference or fraudulent transfer.
Such sums shall be reinstated as Obligations as of the date they arose, but for
purposes of any statute limiting action by the Bank under this Note or relating
to the Obligations, as of the date on which payment is recovered from the Bank.
13. BORROWER'S CONSENTS AND WAIVERS. Borrower waives without notice all
conditions precedent with respect to the Obligations and this Note, including
without limitation acceptance, demand, presentment, protest, notice of dishonor,
default or protest and rights of redemption or appraisal. Borrower waives
without notice any defenses based on actions of others, including without
limitation (i) any modifications, refinancing, extension of credit or other
accommodation with respect to the Obligations, (ii) acceptance of any other
obligor, (iii) any release, replacement, discharge or modifications of the
Collateral, (iv) any exercise or delay or failure to exercise any of the Bank's
rights in the Collateral, regardless of value, (v) any notice given by any
Borrower to the Bank with respect to any other Borrower, (vi) acceptance of any
instrument intended to create an accord and satisfaction with respect to the
Obligations, (vii) any change in location, name, ownership, membership or
structure of any Borrower, account debtor, Depositary or issuer of the
Collateral, and (viii) the expiration of any statue of limitations or the
termination of this Note as to any other Borrower. Further, Borrower authorizes
the Bank, without notice or demand and without affecting Borrower's obligations
hereunder, from time to time: (i) to exchange, enforce or release any collateral
or any part thereof (other than the Collateral) taken from any party for payment
of the Obligations or any part thereof; (ii) to release, substitute or modify
any obligation of any Guarantor or other party in any way obligated to pay the
Obligations or any part thereof, or any party who has given any security,
mortgage or other interest in any other collateral as security for the payment
of the Obligations or any part thereof; (iii) upon the occurrence of any Event
of Default to direct the order or manner of disposition of the Collateral and
any and all other Collateral and the enforcement of any and all endorsements,
guaranties and other obligations relating to the Obligations or any part
thereof, as the Bank, in its sole discretion, may determine; and (iv) to
determine how, when and what application of payments, credits and proceeds of
Collateral, if any, shall be made on the Obligations or any part thereof.
14. MISCELLANEOUS. This Note (with any related mortgage or pledge of deposit
agreement) contains the entire agreement between the Bank and the Borrower with
respect to the Loan, and supersedes every course of dealing, other conduct, oral
agreement, and representation previously made by the Bank. All rights and
remedies of the Bank under applicable law and this Note are cumulative and not
exclusive. No single, partial or delayed exercise by the Bank of any right or
remedy shall preclude the subsequent exercise by the Bank at any time of any
right or remedy without notice. No waiver or amendment of any provision of this
Note shall be effective unless made specifically in writing by the Bank. This
Note is binding obligation enforceable against Borrower and its general
partners, members, successors and assigns and shall innure to the benefit of the
Bank and its successors and assigns. If a court deems any provision of this Note
invalid, the remainder of the Note shall remain in effect. Section heading are
for convenience only. Singular number includes plural and neuter gender includes
masculine and feminine as appropriate. Borrower agrees that in any legal
proceeding, a copy of the Note kept in the Bank's course of business may be
admitted into evidence as an original.
15. NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duty given if delivered to Borrower
(at its address on the Bank's records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower's relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognize overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.
16. JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and severally liable for all amounts and obligations which become due
under this Note and the term "Borrower" shall include each as well as all of
them.
17. GOVERNING LAW AND JURISDICTION. This Note has been delivered to and accepted
by the Bank and will be deemed to be made in the State of New York. This Note
will be interpreted in accordance with the laws of the State of New York,
excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OF FEDERAL COURT IN ANY NEW YORK STATE
COUNTY WHERE THE BANK HAS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY
SERVICE OF PROCESS IN THE MANNER AND AT BORROWER'S ADDRESS SET FORTH ABOVE FOR
PROVIDING NOTICE OR DEMAND: PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL
PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR
EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR
AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN
OR DOMESTIC JURSDICTION. Borrower acknowledges and agrees that the venue
provided above is the most convenient forum for both the Bank and Borrower.
Borrower waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Note.
18. WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY
HAVE IN ANY ACTION OR PROCESSING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT
NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY
TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENER INTO
THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
Borrower authorizes Bank to deduct each monthly payment automatically from
Borrower's DDA account at the bank.
Rochester Portable Specialties, Inc.
By: _____________________________
Xxxxxx Xxxxxx, President
UNCONDITIONAL PERSONAL GUARANTEE
By: _____________________________
Xxxxxx Xxxxxx
