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EXHIBIT 10.26
Loan No.: _______________________________________________________
PROMISSORY NOTE
$1,500,000 November 2nd 1999
Phoenix, Arizona
Interest Rate: Prime Rate plus 350
Basis Points (see Section 3 below).
Maturity Date: March 31, 2000 (see Section 6 below).
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1. FOR VALUE RECEIVED, MOBILITY ELECTRONICS, INC., f/k/a Electronics
Accessory Specialists International, Inc. a Delaware corporation ("Borrower"),
promise(s) to pay to the order of BANK OF AMERICA N.A. successor by merger to
NationsBank, N.A., (the "Bank"), at Bank's Home Office in Phoenix, Arizona, or
at such other place as Bank may from time to time designate, the principal sum
of One Million Five Hundred Thousand Dollars ($1,500,000), plus interest thereon
from the date of the respective advances until paid. This Promissory Note (this
"Note") evidences a loan (the "Loan") from Bank to Borrower pursuant to that
certain Amended and Restated Business Loan Agreement dated of even date herewith
(the "Loan Agreement").
2. This Note is secured by a Security Agreement dated of even date
herewith, a Pledge of Certificate of Deposit ($150,000) dated of even date
herewith, a Pledge of Certificate of Deposit ($75,000) dated of even date
herewith, and a Patent Collateral Assignment and Security Agreement dated of
even date herewith, (collectively, the "Security Documents"), covering certain
property as therein described (the "Property"). It may also be secured by other
collateral. This Note and the Security Documents are among several Loan
Documents, as defined and designated in the Loan Agreement, between Bank and
Borrower and several guarantors. Some or all of the Loan Documents, including
the Extension Agreement, contain provisions for the acceleration of the maturity
of this Note.
3. The principal sum outstanding from time to time under this Note
shall bear interest at the Prime Rate plus Three Hundred Fifty (350) basis
points per year, as the same may change from time to time (the "Prime-based
Rate"). As used herein, the "Prime Rate" means the per annum rate of interest
publicly announced from time to time by Bank at San Francisco, California, as
its Prime Rate. The Prime Rate is set by Bank based on various factors,
including its costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans. Bank may price
loans to its customers at, above, or below the Prime Rate. Any change in the
Prime Rate shall take effect at the opening of business on the day specified in
the public announcement of a change in the Prime Rate.
4. Borrower will pay (i) principal in the amount of $500,000 upon the
execution of this Agreement; and (ii) principal in four (4) successive monthly
installments of Eighty Three Thousand Three Hundred Thirty Three Dollars and
Thirty Three Cents ($83,333.33) plus interest commencing December 1, 1999 and on
the first day of each month thereafter through March 1, 2000. On the Facility II
Expiration Date, Borrower will repay the remaining principal balance plus any
interest then due. Each installment, when paid, will be applied first to the
payment of interest accrued. The amount of interest due, and the portion of each
installment which is applied to interest, will change from time to time if there
are changes in the Prime Rate. The balance, if any, of each installment will be
applied to the repayment of principal. If
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the accrued interest owing exceeds the amount of any installment, Borrower will
pay the excess in addition to the installment. The excess accrued interest will
be paid on the due date of the installment.
5. For purposes of this Note, "interest" shall include any and all
interest payable as provided in this Note, together with any and all sums (the
"Additional Interest") payable by Borrower under any existing or future
agreement between Bank and Borrower. Borrower shall pay any and all Additional
Interest at the times and in the amounts specified in such agreements.
6. All principal and all accrued and unpaid interest and all other
amounts payable hereunder shall be due and payable no later than March 31, 2000.
7. Borrower may prepay some or all of the principal under this Note,
without penalty or premium. All prepayments shall be applied first on late
charges and costs, if any, and then on interest then due and the remainder on
the principal balance. Any payment of principal hereunder, in monthly payments
or otherwise, may not be reborrowed by Xxxxxxxx.
8. If Borrower fails to make any payment of principal or interest when
it is due and payable or upon the occurrence of any Event of Default as defined
hereunder, Xxxxxxxx agrees to pay interest on the outstanding principal and
accrued and unpaid interest at an annual rate (the "Default Rate") of five
hundred (500) basis points in excess of the Prime-based Rate, from the date the
payment becomes due until Borrower pays in full all such amounts due under this
Note.
9. From and after maturity of this Note, whether by acceleration or
otherwise, all sums then due and payable under this Note, including all
principal and all accrued and unpaid interest, shall bear interest until paid in
full at the Default Rate.
10. If an "Event of Default", (as defined in the Loan Agreement)
occurs, at the holder's option, exercisable in its sole discretion, all sums of
principal and interest under this Note shall become immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character.
11. It shall also be an "Event of Default" under this Note if Xxxxxxxx
becomes the subject of any bankruptcy or other voluntary or involuntary
proceeding, in or out of court, for the adjustment of debtor-creditor
relationships ("Insolvency Proceeding"). If that happens all sums of principal
and interest under this Note shall automatically become immediately due and
payable without notice of default, presentment or demand for payment, protest or
notice of nonpayment or dishonor, or other notices or demands of any kind or
character.
12. All amounts payable under this Note are payable in lawful money of
the United States during normal business hours on a Banking Day, as defined
below. Checks constitute payment only when collected.
13. If any lawsuit or arbitration is commenced which arises out of or
relates to this Note, the Loan Documents or the Loan, the prevailing party shall
be entitled to recover from each other party such sums as the court (but not the
jury) or arbitrator may adjudge to be reasonable attorneys' fees in the action
or arbitration, in addition to costs and expenses otherwise allowed by law. In
all other situations, including any matter arising out of or relating to any
Insolvency Proceeding, Xxxxxxxx agrees to pay all of Bank's costs and expenses,
including attorneys' fees, which may be incurred in enforcing or protecting
Bank's rights or interests. From the time(s) incurred until paid in full to
Bank, all such sums shall bear interest at the Default Rate.
14. Whenever Borrower is obligated to pay or reimburse Bank for any
attorneys' fees, those fees shall include the allocated costs for services of
in-house counsel.
15. This Note is governed by the laws of the State of Arizona, without
regard to the choice of law rules of that State.
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16. Xxxxxxxx agrees that the holder of this Note may accept additional
or substitute security for this Note, or release any security or any party
liable for this Note, or extend or renew this Note, all without notice to
Borrower and without affecting the liability of Borrower.
17. If Bank delays in exercising or fails to exercise any of its rights
under this Note, that delay or failure shall not constitute a waiver of any of
Bank's rights, or of any breach, default or failure of condition of or under
this Note. No waiver by Bank of any of its rights, or of any such breach,
default or failure of condition shall be effective, unless the waiver is
expressly stated in a writing signed by Bank. All of Bank's remedies in
connection with this Note, or any of the other Loan Documents or under
applicable law shall be cumulative, and Bank's exercise of any one or more of
those remedies shall not constitute an election of remedies.
18. This Note inures to and binds the heirs, personal representatives,
successors and assigns of Borrower and Bank; provided, however, that Borrower
may not assign this Note or any Loan funds, or assign or delegate any of its
rights or obligations without the prior written consent of Bank in each
instance. Bank in its sole discretion may transfer this Note, and may sell or
assign participations or other interests in all or part of the Loan, on the
terms and subject to the conditions of the Loan Documents, all without notice to
or the consent of Borrower. Also without notice to or the consent of Borrower,
Bank may disclose to any actual or prospective purchaser of any securities
issued or to be issued by Bank, and to any actual or prospective purchaser or
assignee of any participation or other interest in this Note, the Loan or any
other loans made by Bank to Borrower (whether evidenced by this Note or
otherwise), any financial or other information, data or material in Bank's
possession relating to Borrower, the Loan or the Property, including any
improvements on it. If Bank so requests, Borrower shall sign and deliver a new
note to be issued in exchange for this Note.
19. As used in this Note, the terms "Bank", "holder" and "holder of
this Note" are interchangeable. As used in this Note, the word "include(s)"
means "include(s), without limitation", and the word "including" means
"including, but not limited to." The term "Banking Day" is defined to mean a day
other than a Saturday or Sunday, on which Bank is open for business in Phoenix,
Arizona.
20. If more than one person or entity are signing this Note as
Borrower, their obligations under this Note shall be joint and several.
21. Each periodic payment shall be credited first on late charges and
costs of collection, if any, and then on interest then due and the remainder on
principal, and interest shall thereupon cease upon the principal so credited.
22. Time is of the essence of each and every obligation set forth
herein, including without limitation, payment.
23. The makers, endorsers, and guarantors of this Note jointly and
severally waive diligence, demand, presentment for payment, protest, notice of
non-payment and of protest, notice of default, notice of acceleration and all
other notices or demands of any kind. They jointly and severally consent,
without notice to them and without release of their liability to extensions and
accommodations given by the holder of this Note, the release notifications and
exchanges of any security, and to release, in whole or in part, of any other
maker, endorser or guarantor, and they each agree to make payment without the
prior consent by the holder to any security or against any other maker, endorser
or guarantor.
24. Xxxxxxxx has caused this Note to be executed by its officers, who
were duly authorized and directed to do so by a resolution of its Board of
Directors which was duly passed and adopted by the requisite number of members
of the Board at a meeting which was duly called, noticed, and held or by a duly
adopted Action by the Unanimous Written Consent of the Board of Directors.
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Borrower: Mailing Address:
Mobility Electronics, Inc., f/k/a 0000 X. Xxxxxxxx Xxxx
Electronics Accessory Specialists Scottsdale, AZ 85260
International, Inc., a Delaware corporation ATTN: Xxxxxxx Xxxxx
By: /s/ XXXXXXX X. XXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxx
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Title: Vice President & CFO
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STATE OF ARIZONA )
) ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 2nd day of
November, 1999 by Xxxxxxx X. Xxxxxxxxx, the Vice President & CFO of Mobility
Electronics, a(n) Delaware corporation, on behalf of the Borrower.
My commission expires: /s/ XXXXX X. XXXXXXX
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January 11, 2003 Notary Public
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(SEAL)
