Exhibit 10.13
PROMISSORY NOTE
--------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Initials
$750,000.00 10-26-98 4-26-99 101
--------------------------------------------------------------------------------
Reference 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.
--------------------------------------------------------------------------------
Borrower: Suburba Acquisition Company, Inc. Lender: AutoPrime, Inc.
dba ACE Motor Co._ 000 Xxxxxxxx Xx.
0000 Xxxxxx Xxxx, Xxxxx 000 Xxxxx 0000
Xxxxxx, XX 75225_ Xxxxxx, XX 00000
Principal Amount: $750,000.00 Initial Rate: 15.000% Note Date: 10-26-98
PROMISE TO PAY. Suburba Acquisition Company, Inc. ("Borrower") promises to pay
AutoPrime, Inc. ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Seven hundred fifty thousand & 00/100 Dollars
($750,000.00) or so much as may be outstanding together with interest on the
unpaid outstanding principal balance as advanced from time to time under this
Note. Interest shall be calculated from the date of each advance until repayment
of each advance or maturity, whichever occurs first.
CHOICE OF USURY CEILING AND INTEREST RATE. The interest rate on this note has
been implemented under the "Weekly Rate" as referred to in Section 303.201 of
the Texas Finance Code and Articles 1D.002 and 1D.003 of the Texas Credit Title.
The terms, included the rate, or index, formula or provision of law used to
compute the rate on the Note, will be subject to revision as to current and
future balances, from time to time by notice from Lender in compliance with
Section 303.403 of the Texas Finance Code.
PAYMENT. Borrower will pay this loan on demand, or if no demand is made, in one
payment of all outstanding principal plus all accrued unpaid interest on April
26, 1999. In addition, Borrower will pay regular monthly payments of accrued
unpaid interest beginning December 1, 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 Lender's address
shown above or a such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges. Notwithstanding any other provision on
this Note, Lender will not charge interest on any undisbursed loan proceeds. No
scheduled payment, whether of principal or interest or both, will be due unless
sufficient loan funds have been disbursed by the scheduled payment date to
justify the payment.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index known as the Wall Street Journal Prime
Rate (the "Index"). The Index is not necessarily the lowest rate charged by
Lender on its loans and is set by Lender in its sole discretion. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current
Index rate upon Borrower'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 Index currently is 8.5% per annum. The interest rate to
be applied prior to maturity to the unpaid principal balance of this Note will
be at a rate of 6.5 percentage points over the Index, resulting in an initial
rate of 15% per annum. Notice: Under no circumstances will the interest rare on
this Note be more than the maximum rate allowed by applicable law. For purposes
of this Note, the "maximum rate allowed by applicable law" means the greater of
(a) the maximum rate of interest permitted under federal or other law applicable
107
to the indebtedness evidenced by this Note, or (b) the "Weekly Rate" as referred
to in Section 303.201 of the Texas Finance Code and Articles 1D.002 and 1D.003
of the Texas Credit Title.
PREPAYMENT. 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 Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather, they will reduce the principal balance due.
POST MATURITY RATE. The Post Maturity Rate on this Note is the maximum rate
allowed by applicable law. Borrower will pay interest on all sums due after
final maturity, whether by acceleration or otherwise, at that rate, with the
exception of any amounts added to the principal balance of this Note based on
Lender's payment of insurance premiums, which will continue to accrue interest
at the pre-maturity rate.
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
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower' 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 Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any of the events described in this default section occurs with respect to
any general partner of Borrower or any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the indebtedness is impaired. (i) Lender
in good xxxxx xxxxx itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire indebtedness,
including the unpaid principal balance on this Note, all accrued unpaid
interest, and all other amounts, costs and expenses for which Borrower is
responsible under this Note or any other agreement with Lender pertaining to
this loan, immediately due, without notice, and then Borrower will pay that
amount. Lender may hire an attorney to help collect this Note if Borrower does
not pay, and Borrower will pay Lender's reasonable attorney's fees. Borrower
also will pay Lender all other amounts actually incurred by Lender as court
costs, lawful fees for filing, recording, or releasing to any public office any
instrument securing this loan; the reasonable cost actually expended for
repossessing, storing, preparing for sale, and selling any security; and fees
for noting a lien on or transferring a certificate to title to any motor vehicle
offered as security for this loan, or premiums or identifiable charges received
in connection with the sale of authorized insurance. This Note has been
delivered to Lender and accepted by Lender in the State of Texas. If there is a
lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of
the courts of Dallas County, the State of Texas. This Note shall be governed by
and construed in accordance with the laws of the State of Texas and applicable
Federal laws.
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, Borrower'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 XXX and Xxxxx accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by a Blanket lien on vehicle inventory.
108
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Borrower or as provided in this paragraph.
All oral requests shall be confirmed in writing on the day of the request. All
communications, instructions, or directions by telephone otherwise to Lender are
to be directed to Lender's office shown above. The following party or parties
are authorized as provided in this paragraph to request advances under the line
of credit until Lender receives from Borrower at Lender's address shown above
written notice of revocation of their authority: Xxxxxxx Xxxxxx,
_______________________. ADVANCE REQUESTS CAN BE OBTAINED UPON NOTIFICATION IN
WRITING TO AutoPrime, Inc. Borrower 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 Borrower's accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender'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
the 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. This revolving line of credit shall not be subject to sec.
346 of the Texas Finance Code.
DISHONORED CHECK CHARGE. In the event a check offered in full or partial payment
on this loan is returned unpaid, Lender may charge a fee for the purpose of
defraying the expense incident to handling such returned check, and Borrower
agrees to pay such fee. The fee shall not exceed the maximum amount permitted
under applicable law.
DOCUMENT REFERENCE. The REVOLVING CREDIT AGREEMENT FLOOR PLAN OF MOTOR VEHICLES
between Suburba Acquisition Company, Inc. and AutoPrime, Inc. is hereby
referenced to and made a part of this Promissory Note and related documents.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment of this Note on its demand. If any part of this Note cannot be
enforced, this fact will not affect the rest of the note. In particular, this
section means (among other things) that Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for charge, collect, take,
reserve or receive (collectively referred to herein as "charge or collect"), any
amount in the nature of interest or in the nature of a fee for this loan, which
would in any way or event (including demand, prepayment, or acceleration) cause
Lender to charge or collect more for this loan than the maximum Lender would be
permitted to charge or collect by federal law or the law of the State of Texas
(as applicable). Any such excessive interest or unauthorized fee shall, instead
of anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when that principal has been paid in full, be refunded
to Borrower. The right to accelerate maturity of sums due under this Note does
not include the right to accelerate any interest which has not otherwise accrued
on the date of such acceleration, and Lender does not intend to charge or
collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of the loan evidenced by
this Note until payment in full so that the rate or amount of interest on
account of the loan evidenced hereby does not exceed the applicable usury
ceiling. Lender may delay or forego 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, notice of dishonor, notice of intent
to accelerate the maturity of this Note, and notice of acceleration of the
maturity of this Note. 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 part, partner, or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral without the consent of or notice to anyone.
All such parties also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the modification is made.
109
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.
BORROWER:
Suburba Acquisition Company, Inc.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Xxxxxxx Xxxxxx, President
110
