Exhibit 10(e)
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
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$3,000,000.00 04-06-1998 06-15-1999 43262 4 330 SCA
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References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
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BORROWER: Credit Concepts, Inc. LENDER: Pacific Continental Bank
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0 P.O. Box 10727
Eugene, OR 97401 Eugene, OR 97440
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PRINCIPAL AMOUNT: $3,000,000.00 INITIAL RATE: 10.750% DATE OF NOTE: April 6, 1998
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PROMISE TO PAY. Credit Concepts, Inc. ("Borrower") promises to pay to Pacific
Continental Bank ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Three Million & 00/100 Dollars ($3,000,000.00)
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on June 15, 1999. In addition,
Xxxxxxxx will pay regular monthly payments of accrued unpaid interest beginning
May 15, 1998, and all subsequent interest payments are due on the same day of
each month after that. Interest on this Note is computed on a 365/365 simple
interest basis; that is, by applying the ratio of the annual interest rate over
the number of days in a year, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Xxxxxx's address shown above or at such other place
as Lender may designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection costs
and any late charges, then to any unpaid interest, and any remaining amount to
principal.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Xxxxxx's Prime Rate
(the "Index"). This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers. This rate may or
may not be the lowest rate available from Lender at any given time. Lender
will tell Borrower the current Index rate upon Xxxxxxxx's request. Borrower
understands that Lender may make loans based on other rates as well. The
interest rate change will not occur more often than each DAY THE PRIME CHANGES.
The Index currently is 8.500% per annum. The interest rate to be applied to
the unpaid principal balance of this Note will be at a rate of 2.250 percentage
points over the Index, adjusted it necessary for the minimum and maximum rate
limitations described below, resulting in an initial rate of 10.750% per annum.
Notwithstanding any other provision of this Note, the variable interest rate or
rates provided for in this Note will be subject to the following minimum and
maximum rates. NOTICE: Under no circumstances will the interest rate on this
Note be less than 10.250% per annum or more than the maximum rate allowed by
applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment
of this Note, Xxxxxxxx understands that Lender is entitled to a minimum
interest charge of $5.00. Other than Xxxxxxxx's obligation to pay any minimum
interest charge, Borrower may pay without penalty all or a portion of the
amount owed earlier than it is due. Early payments will not, unless agreed to
by Xxxxxx in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to
make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 16 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to
perform when due any other term, obligation, covenant, or condition contained
in this Note or any agreement related to this Note, or in any other agreement
or loan Borrower has with Lender. (c) Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the Related Documents.
(d) Any representation or statement made or furnished to Lender by Borrower or
on Xxxxxxxx's behalf is false or misleading in any material respect either now
or at the time made or furnished. (e) Borrower dissolves (regardless of
whether election to continue is made), any member withdraws from Borrower, any
member dies, or any of the members or Borrower becomes insolvent, a receiver is
appointed for any part of Xxxxxxxx's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Xxxxxxxx's property on or in which Xxxxxx has a lien or
security interest. This includes a garnishment of any of Xxxxxxxx's accounts
with Xxxxxx. (g) Any guarantor dies or any of the other events described in
this default section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition, or Xxxxxx
believes the prospect of payment or performance of the indebtedness is
impaired. (i) Lender in good xxxxx xxxxx Itself insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender
demanding cure of such default: (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Xxxxxx's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this
Note to 5.250 percentage points over the Index. The interest rate will not
exceed the maximum rate permitted by applicable law. Lender may hire or pay
someone else to help collect this Note if Borrower does not pay. Xxxxxxxx also
will pay Lender that amount. This includes, subject to any limits under
applicable law, Xxxxxx's attorneys' fees and Xxxxxx's legal expenses whether or
not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Xxxxxxxx also will pay any
court costs, in addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the State of Oregon. If there Is
a lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to submit to the jurisdiction
of the courts of Lane County, the State of Oregon. Xxxxxx and Xxxxxxxx hereby
waive the right to any jury trial in any action, proceeding, or counterclaim
brought by either Xxxxxx or Borrower against the other. This Note shall be
governed by and construed in accordance with the laws of the State of Oregon.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $18.50 if Borrower
makes a payment on Xxxxxxxx's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Xxxxxxxx's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Xxxxx accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Xxxxxx, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested either orally or in writing by Borrower or by
an authorized person. Lender may, but need not, require that all oral requests
be confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Xxxxxx's office shown
above. The following party or parties are authorized to request advances under
the line of credit until Xxxxxx receives from Borrower at Xxxxxx's address
shown above written notice of revocation of their authority: Xxxxxx X. Xxxxxx,
President; and Xxxxxx X. Xxxxxx, Secretary. Xxxxxxxx agrees to be liable for
all sums either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Xxxxxxxx's accounts with Xxxxxx,
regardless of the fact that persons other than those authorized to borrow have
authority to draw against the accounts. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this Note or by
Xxxxxx's internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; (d) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (e) Lender in
good xxxxx xxxxx itself insecure under this Note or any other agreement between
Lender and Borrower.
OPERATING PROCEDURES. Advances will be based on eligible notes receivable,
contracts receivable and accounts, and will be limited to 70% of the aggregate
outstanding balances of notes receivable. Lender reserves the right to
eliminate from the Borrowing Base those notes receivable and accounts it deems
ineligible or uncollectible.
PRIOR NOTE. This Note replaces the Promissory Note delivered to Lender on
March 10, 1998 by Credit Concepts, Inc. Lender reserves the right to eliminate
from the Borrowing Base those notes receivable and accounts it deems ineligible
or uncollectible.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Xxxxxx's security interest in the collateral;
and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Xxxxxx may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE
NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
US TO BE ENFORCEABLE.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. XXXXXXXX AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Credit Concepts, Inc.
By: ____________________________________ By:______________________________
Xxxxxx X. Xxxxxx, President Xxxxxx X. Xxxxxx, Secretary
