EAB
MASTER NOTE (Eurodollar/Prime Rate)
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This Note replaces and supersedes that certain Master note (Eurodollar/ Prime
Rate) dated November 30, 1998 in the principal amount of $14,000,000 from the
undersigned to the Bank.
$16,000,000 Date: October 4, 1999
FOR VALUE RECEIVED, the undersigned, a New York corporation, promises to
pay to the order of EUROPEAN AMERICAN BANK (the "Bank"), on or before December
31, 1999, (the "Maturity Date"), the sum of Sixteen Million Dollars
($16,000,000), or if less, the aggregate unpaid principal amount of all advances
made by the Bank pursuant to the line of credit (each an "Advance" and
collectively, the "Advances"), not to exceed an aggregate amount at any one time
outstanding of Sixteen Million Dollars ($16,000,000), available to the
undersigned hereunder (the "Line") together with interest thereon as set forth
herein.
Each Advance hereunder which is a Eurodollar Advance (as defined below)
shall bear interest on the unpaid principal amount thereof for the Interest
Period applicable thereto at a rate per annum equal to the Reserve Adjusted
Libor determined for each Interest Period therefor in accordance with the terms
of this Note plus a margin of 1 1/2% per annum. Each Advance which is a Prime
Rate Advance (as defined below) shall bear interest on the unpaid principal
amount thereof from the date thereof until payment of such Prime Rate Advance in
full at a fluctuating rate per annum equal to 1/2% below the rate of interest as
is publicly announced by the Bank as its Prime Rate. The undersigned shall
notify the Bank not later than 12 noon three Business Days prior to each Advance
hereunder which the undersigned requests to maintain at a rate of interest based
on Reserve Adjusted Libor (a "Eurodollar" Advance), and not later than 12 noon
on the date of each Advance which the undersigned request to maintain at a rate
of interest based on the Prime Rate (a "Prime Rate Advance"). All requests for
Advances shall be irrevocable and shall be in the minimum amount of $100,000.
Each request by the undersigned for an Advance hereunder shall specify whether
the requested Advance is a Eurodollar Advance or a Prime Rate Advance, the
proposed date to fund the Advance, and if a Eurodollar Advance is requested, the
Interest Period applicable thereto.
Any Eurodollar Advance may be continued as a Eurodollar Advance upon
expiration of an Interest Period with respect thereto by complying with the
notice provisions contained in the definition of Interest Period; provided,
however, that no Eurodollar Advance may be continued as such when any Event of
Default or event which upon notice, passage of time or both would constitute an
Event of Default has occurred and is continuing but shall be automatically
converted to a Prime Rate Advance on the last date of the Interest Period in
effect when the Bank is notified of such default or Event of Default.
The undersigned may elect from time to time to convert outstanding
Eurodollar Advances to Prime Rate Advances by giving the bank at least three
Business Days prior irrevocable notice of such election: provided that any
conversion of a Eurodollar Advance may be made only on the last day of an
Interest Period with respect thereto. The undersigned may elect from time to
time to convert an outstanding Prime Rate Advance to a Eurodollar Advance by
giving the Bank irrevocable written notice of such election not later than 12
noon, three Business Days prior to the date of the proposed conversion and
further provided that (i) the conversion shall be in the minimum principal
amount of $100,000 and (ii) no Event of Default or event upon notice, passage of
time or both would constitute an Event of Default shall have occurred and be
continuing. Notwithstanding the foregoing, no Advance may be
converted to or continued as a Eurodollar Advance if the Interest Period would
extend beyond the Maturity Date.
Interest in respect of Prime Rate Advances shall be payable on the first
day of each month commending on the first such date to occur after the date the
Advance is made, and on the Maturity Date. Interest in respect of Eurodollar
Advances shall be payable on the last day of the Interest Period in respect
thereof. Interest shall be calculated on the basis of a 360-day year for the
actual number of days elapsed. All payments hereunder shall be payable in
immediately available funds in lawful money of the United States. The
undersigned authorizes the Bank to charge any of the undersigned's accounts for
payments of principal or interest. Any payment of principal or of interest
payable hereunder which is not paid when due, whether at maturity, by
acceleration, or otherwise, shall bear interest from the date due until paid in
full at a rate per annum equal to three percent (3%) above the rate otherwise
payable with respect thereto.
All requests for advances shall be irrevocable and shall be for a minimum
of $100,000 and must be received by the Bank no later than 12:00 noon on the
date of the proposed advance. The Bank may act without liability upon the basis
of telephonic notice believed by the Bank in good faith to be from the
undersigned. In each such case, the undersigned hereby waives the right to
dispute the Bank's record of the terms of such telephonic notice. The
undersigned shall immediately confirm to the Bank in writing each telephonic
notice. All advances under the Line are at the Bank's sole and absolute
discretion and the Bank, at its option and in its sole and absolute discretion
and without notice to the undersigned, may decline to many any advance requested
by the undersigned.
Subject to the terms and conditions hereof and the terms and conditions set
forth in any agreement in writing between the Bank and the undersigned, the
undersigned may borrow, repay in whole or in part, and reborrow on a revolving
basis, up to the maximum amount of the Line. Prime Rate Advances may be prepaid
without premium or penalty together with accrued interest thereon to and
including the date of prepayment. Eurodollar Advances may be prepaid without
premium or penalty (except as provided in the next succeeding paragraph)
together with accrued interest thereon to and including the date of prepayment,
provided such prepayment date must be the last day of the then current Interest
Period of such Advance. The Bank shall maintain its records to reflect the
amount and date of each advance and of each payment of principal and interest
thereon. All such records shall, absent manifest error, be conclusive as to the
outstanding principal amount hereof; provided, however, that the failure to make
any notation to the Bank's records shall not limit or otherwise affect the
obligations of the undersigned or repay each advance made by the Bank, in
accordance with the terms hereof.
The undersigned agrees to indemnify the Bank and hold the Bank harmless
from any loss or expense which the Bank may sustain or incur, including without
limitation, interest or fees payable by the Bank to lenders of funds obtained by
it in order to maintain a Eurodollar Advance hereunder, as a consequence of (a)
default by the undersigned in payment of the principal amount of interest on a
Eurodollar Advance, (b) default by the undersigned in making any prepayment of a
Eurodollar Advance after the undersigned gives notice in accordance with this
Note and/or (c) the making of any payment of a Eurodollar Advance on a day which
is not the last day of the then applicable Interest Period with respect thereto.
When claiming indemnification under this paragraph, the Bank shall provide to
the undersigned a statement explaining the amount of any such loss or expense
which statement shall in the absence of manifest error be conclusive with
respect to the undersigned. The indemnity obligations hereunder shall survive
payment in full of the Note.
As security for the payment of this Note and all other obligations and
liabilities of the undersigned to the Bank, whether now or hereafter existing,
join, several, direct, indirect, absolute, contingent,
secured, matured or unmatured, the undersigned grants to the Bank a right of
setoff against, a continuing security interest in, and an assignment and pledge
of all moneys deposits (general or special), securities and other property of
the undersigned and the proceeds thereof, now or hereafter held by the Bank on
deposit, in safekeeping, in transit or otherwise, at any time credited by or due
from the Bank to the undersigned, or in which the undersigned shall have an
interest.
Upon the occurrence and continuance of any of the following (each an "Event
of Default"): (a) default in the payment when due of any amount hereunder; (b)
filing by or against the undersigned of a petition commencing any proceeding
under any bankruptcy, reorganization, rearrangement, readjustment or debt,
dissolution or liquidation law or statute of any jurisdiction, now or hereafter
in effect; (c) making by the undersigned of an assignment for the benefit of
creditor; (d) petitioning or applying to any tribunal for the appointment of a
custodial, receiver or trustee for the undersigned or for a substantial part of
its assets; (e) death or incapacity of the undersigned (if an individual); (f)
entry of any judgement or order of attachment, injunction, or governmental tax
lien or levy issued against the undersigned or against any property of the
undersigned; (g) consent by the undersigned to assume, suffer or allow to exist,
without prior written consent of the bank, any lien, mortgage, assignment or
other encumbrance on any of its assets or personal property, now owned or
hereafter acquired, except those liens, mortgages, assignments or other
encumbrances in existence on the date hereof and consented to in writing by the
Bank; (h) default in the punctual payment or performance of this or any other
obligation to the bank or to any other lender at any time; (i) the existence or
occurrence at anytime of one or more conditions or events which, in the sole
opinion of the Bank, has resulted or is reasonably likely to result in a
material adverse change in the business, properties for financial condition of
the undersigned; (j) failure on request to furnish any financial information or
to permit inspection of the books and records of the undersigned; (k) any
warranty, representation or statement in any application, statement or agreement
with the Bank proves false in any material respect; (l) default in the
observance or performance of any covenant or agreement of the undersigned herein
or in any other agreement between the Bank and the undersigned; or (m) any of
the foregoing events (other than the event described in clause (a)) shall occur
with respect to any guarantor of the undersigned's obligations hereunder then
this Note shall, at the sole option of the Bank, become dues and payable without
notice or demand; provided, however, if an event described in clause (b), clause
(c) or clause (d) above occurs, this Note shall automatically become due and
payable.
Upon the occurrence and during the continuance of an Event of Default, the
Bank shall be entitled to setoff against and apply to the payment hereof the
balance of any account or accounts maintained with the Bank by the undersigned
and to exercise any other right or remedy granted hereunder, or under any
agreement between the undersigned and the Bank or available at law or in equity,
including, but not limited to, the rights and remedies of a secured party under
the New York Uniform Commercial Code. The failure by the Bank at any time to
exercise any such right shall not be deemed a waiver thereof, nor shall it bar
the exercise of any such right at a later date. Each and every right and remedy
granted to the Bank hereunder or under any agreement between the undersigned and
the Bank or available at law or in equity shall be cumulative and not exclusive
of any other right, powers, privileges or remedies, and may be exercised by the
Bank from time to time as often as may be necessary in the sole and absolute
discretion of the bank.
The undersigned agrees to pay, on demand, all of the Bank's costs and
expenses, including reasonable counsel fees (whether in-house or outside
counsel), in connection with the collection of any amounts due to the Bank
hereunder or in connection with the enforcement of the Bank's right under this
Note.
This Note shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to principles of conflict or choice
of laws.
The undersigned covenants and represents that any reprogramming or other
corrective modifications require to permit, on or after January 1, 2000, the
proper functioning of and receipt, transmission, processing, storage,
manipulation or other utilization of date by (a) the undersigned's and it's
subsidiaries' computer systems and (ii) equipment containing embedded microchips
has been or will be timely completed such that no material adverse effect will
occur with respect to the undersigned's business or operations stemming from the
failure of the undersigned's or its subsidiaries' computer hardware or software
to function at least as effectively following December 31, 1999 as it did at all
time periods prior thereto.
THE UNDERSIGNED HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS NOTE OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE
IN THE COUNTY OF NASSAU OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVES AND AGREES NOT TO
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, TAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IN IMPROPER, OR THAT THIS NOTE OR ANY
OTHER DOCUMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY
SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE UNDERSIGNED AGREES
NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY
SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED
UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. THE UNDERSIGNED AGREES THAT
SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO ITS
ADDRESS SET FORTH BELOW OR SUCH OTHER ADDRESS THAT THE UNDERSIGNED SHALL HAVE
NOTIFIED THE BANK IN WRITING OR ANY METHOD AUTHORIZED BY THE LAWS AND THE STATE
OF NEW YORK. EXCEPT AS PROHIBITED BY LAW, THE UNDERSIGNED HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.
Neither the undersigned nor any affiliate of the undersigned shall use any
portion of the proceeds of to Loans, nor have any Letter of Credit issued,
either directly or indirectly, for the purpose of purchasing securities
underwritten by ABN AMRO Inc., an affiliate of the Bank.
The undersigned and the Bank hereby agree and acknowledge that any and all
information relating to the undersigned which is furnished by the undersigned to
the Bank (or to any affiliate of the Bank), and which is non-public,
confidential or proprietary in nature, shall be kept confidential by the Bank or
such affiliate in accordance with applicable law; provided, however, that such
information and other credit information relating to the undersigned may be
distributed by the Bank or such affiliate (a) to the Bank's or such affiliate's
directors, officers, employees, attorneys, affiliates, attorneys, auditors and
regulators, and (b) upon the order of a court or other governmental agency
having jurisdiction over the Bank or such affiliate, to any other party. The
undersigned and the Bank further agree that this provision shall survive the
termination of this Note.
The bank shall not, by any act, delay, omission or otherwise, be deemed to
have waived any of its rights or remedies hereunder. No change, amendment,
modification, termination, wavier, or discharge, in whole or in part, of any
provision of this Note shall be effective unless in writing and signed by the
Bank, and if so given by the Bank, shall be effective only in the specific
instance in which given. The undersigned acknowledges that this Note and the
undersigned's obligations under this Note are, and shall at all times continue
to be, absolute and unconditional in all respects, and shall at all times be
valid and enforceable irrespective of any other agreements or circumstances or
any nature whatsoever which might otherwise constitute a defense to this Note
and the obligation of the undersigned under this Note. The undersigned
absolutely, unconditionally and irrevocably waives any and all right to assert
any set-off, counterclaim or crossclaim of any nature whatsoever with respect to
this Note or the undersigned's obligations hereunder.
In the event any one or more of the provisions contained in this Note
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
The undersigned hereby waives presentment, demand for payment, protest,
notice of dishonor, and any and all other notices or demands in connection with
the delivery, acceptance, performance, default or enforcement of this Note.
As used herein the following terms shall have the following meanings:
"Bank" shall be deemed to include the Bank, its successors and assigns and
any holder thereof.
"Business Day" means (a) a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close and (b) relative tot he date of (i) continuing an Advance as, or
converting an Advance to, a Eurodollar Advance, (ii) making any payment or
prepayment of principal of or payment of interest on a Eurodollar Advance, or
(iii) the undersigned giving any notice (or the number of Business Days to
elapse prior tot he effectiveness thereof) in connection with any matter
referred to in (b)(i) or (b)(ii), any day on which dealings in U.S. dollars are
carried on in the London interbank eurodollar market.
"Eurocurrency Reserve Requirement" means for any day as applied to a
Eurodollar Advance, the aggregate (without duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto), as from time
to time hereafter in effect, dealing with reserve requirements prescribed for
eruocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of such system.
"Interest Period" with respect to any Eurodollar Advance means:
(a) Initially, the period commencing on the date such Eurodollar Advance is
made and ending one, two or three months thereafter; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such eurodollar Advance and ending one,
two or three months thereafter, as selected by the undersigned by irrevocable
written notice to the bank not less than three (3) Business Days prior to the
last day of the then current Interest Period with respect to such Eurodollar
Advance; provided, however, that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Advance would
otherwise end on a day which is not a Business Day, the Interest Period
shall be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) if the undersigned shall fail to give notice as provided in
clause (b) above, the undersigned shall be deemed to have requested
conversion of the affected Eurodollar Advance to a Prime Rate Advance of
the last day of the then current Interest Period with respect thereto;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(iv) no Interest Period may be selected which ends later than the
Maturity Date.
"Prime Rate" shall mean a fluctuating rate per annum equal to the rate of
interest publicly announced by the Bank at its principal office from time to
time as its Prime Rate. Any change int he Prime Rate shall be effective on the
date such change is announced by the Bank.
"Reserve Adjusted Libor" shall mean with respect to the Interest Period
pertaining to a Eurodollar Advance, the rate per annum equal to the quotient
(rounded upwards to the next highest 1/16 of one percent) of (a) the annual rate
of interest at which dollar deposits of an amount comparable to the amount of
such Loan and for a period equal to the Interest Period applicable thereto are
offered to the ban in the London interbank market at approximately 11:00 a.m.
(London time) on the second Business Day prior to the beginning of such Interest
Period, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve
Requirement.
"Undersigned" shall mean, if this Note is signed by more than one party,
unless otherwise stated herein, shall mean the "undersigned and each of them"
and each undertaking herein contained shall be their joint and several
undertaking. The Bank may proceed against one or more of the undersigned at one
time or from time to time as it elects in its sole and absolute discretion.
In the event that the Bank shall have determined (which determination shall
be conclusive and binding upon the undersigned) that, by reason of circumstances
affecting the London interbank market, adequate and reasonable means do not
exist for ascertaining the Reserve Adjusted Libor for any requested Interest
Period or with respect to the continuation of a Eurodollar Advance beyond the
expiration of the then current Interest Period with respect thereto, the Bank
shall forthwith give notice of such determination, confirmed in writing, to the
undersigned. If such notice is given, any outstanding Eurodollar Advance shall
be converted, on the last day of the then current Interest Period with respect
thereto, to a Prime Rate Advance. Such notice shall be withdrawn by the Bank
when the Bank shall determine that adequate and reasonable means exist for
ascertaining Reserve Adjusted Libor.
Notwithstanding anything to the contrary contained elsewhere in this Note,
if any change after the date hereof in law, rule, regulation, guideline or order
or in the interpretation thereof by any governmental authority charged with the
administration thereof, shall make it unlawful for the Bank to make or maintain
any Advance as a Eurodollar Advance, then, by written notice to the undersigned,
the Bank may require that the Eurodollar Advance be converted to a Prime Rate
Advance, whereupon the
Eurodollar Advance shall be automatically converted to a Prime Rate Advance as
of the date of such notice to the undersigned.
In the event that any change in applicable law or regulation, or in the
interpretation thereof by any governmental authority charged with the
administration thereof, shall impose on or deem applicable to the Bank any
reserve requirements against this Note or the Line or impose upon the Bank any
other costs or assessments, the undersigned shall pay to the Bank on demand an
amount sufficient to compensate the Bank for the additional cost resulting from
the maintenance or imposition of such reserves, costs or assessments.
Any consents, agreements, instructions or requests pertaining to any matter
in connection with this Note, signed by any one of the undersigned, shall be
binding upon all of the undersigned. This Note shall bind the respective
successors, heirs or representatives of the undersigned. This Note and the Line
shall not be assigned by the undersigned without the Bank's prior written
consent.
IN WITNESS WHEREOF, the undersigned has duly executed this Note the day and
year first above written.
Witness:________________ Elk Associates Funding Corp.
By:__________________________
Name: Gary C. Granoff
Title: President
Borrower's Address:
747 Third Avenue
New York, NY 10017