PROMISSORY NOTE
$ 3,750,000
City, State: TITUSVILLE, FL 32780
Date: Month FEBRUARY 24, 1998
FOR VALUE RECEIVED, the undersigned FIRST CHOICE AUTO FINANCE, INC., a
FLORIDA corporation ("Borrower"), promises to pay to Manheim Automotive
Financial Services, Inc.("Lender"), or order, at its place of business at 1400
Lake Hearn Drive, N.E., Atlanta, Georgia 30319, Attention: Manager of Operations
or at such other place as may be designated in writing by the holder of this
Promissory Note ("Note"), so much of the principal sum of THREE MILLION AND
SEVEN HUNDRED FIFTY THOUSAND Dollars ($3,750,000), which has been advanced by
Lender and remains outstanding pursuant to the terms of a Security Agreement
dated as FEBRUARY 24, 1998 between Borrower and Lender (the "Security
Agreement"), together with interest on the unpaid principal balance advanced
hereunder from the date of the Advance until paid, at a fluctuating interest
rate per annum equal to the Index Rate (as hereinafter defined), plus an
applicable percentage as set forth below and provided, however, that amounts
outstanding with respect to the following types of Advances cannot exceed the
limits listed below:
Applicable
Percentage Rate
Types of Advances Amount Over Index Rate
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Advances for Inventory
Finance Loan $3,750,000 1.5%
The initial Advance, all subsequent Advances and all payments made on
account of principal may be reflected on monthly statements if provided by
Lender to Borrower. The aggregate unpaid principal amount shown on any monthly
statement shall be rebuttable presumptive evidence of the principal amount owing
and unpaid on this Note. The failure to record the date and amount of any
Advance on such monthly statement or provide such monthly statement, shall not,
however, limit or otherwise affect the obligations of the Borrower under the
Security Agreement or under this Note to repay the principal amount of the
Advances together with all interest accruing thereon.
"Index Rate" shall mean the rate quoted as the "Prime Rate" in the column
entitled "Money Rates" published in The Wall Street Journal (in the event no
such rate is published in The Wall Street Journal on such date, the Index Rate
shall be the "Prime Rate" shown in such column for the most recent business day
preceding the last business day of such month on which such rate was published)
or, in the event The Wall Street Journal does not quote a "Prime Rate", the rate
quoted as the "Prime Rate" in a publication as Lender may, from time to time,
hereafter designate in writing. The Index Rate shall initially be determined by
Lender as of the Business Day preceding the date of the Security Agreement and
shall remain in effect for the remainder of such calendar month in which such
date occurs; thereafter, the Index Rate shall be determined by Lender on the
last Business Day of each month and the Interest Rate based on such Index Rate
shall be in effect for the following month. Interest shall be calculated on the
basis of a 360-day year for actual days elapsed.
Principal and interest hereunder shall be due and payable by Borrower on
the dates and in the manner as follows:
(a) Subject to any payment changes resulting from changes in the
Index Rate, Borrower will pay regular monthly installments of
interest only, due as of each payment date, commencing on the
fifteenth (15th) day of MARCH 1998, with all subsequent
payments to be due on the fifteenth (15th) day of each month
thereafter or such other dates as may be specified by the
Lender; and
(b) Any Advance for a Vehicle shall be payable on the earliest of:
(i) forty-eight (48) hours from the time of sale or within
twenty-four (24) hours from the time Borrower receives
payment by or on behalf of the purchaser of such
Vehicle; or
(ii) the Maturity Date (as defined below) for such Advance;
or
(iii) the termination of the Security Agreement.
(c) Payments of principal required from time to time if the
Vehicle is subject to the Lender's curtailment program.
The "Maturity Date" for any Advance shall mean the date upon which an
Advance is due as determined by the Lender, provided however if no such date is
specified by Lender then the advance shall be deemed due upon demand of Lender.
Borrower may prepay at any time all or part of the principal balance under this
Note without penalty. All principal and interest, costs and expenses due
hereunder are payable in lawful money of the United States of America.
This Note has been executed and delivered pursuant to the Security
Agreement. Terms defined in the Security Agreement and not otherwise defined
herein are used herein with the meanings defined for those terms in the Security
Agreement. Upon the occurrence of an Event of Default, the entire principal
balance outstanding hereunder plus accrued interest shall, at the option of
Lender, mature and be immediately due and payable. Any Advance in default shall
bear interest at a rate equal to the Interest Rate plus three percent (3%) until
paid in full.
The obligations under this Note are secured by the Collateral pledged by
the Borrower to the Lender pursuant to the Security Agreement.
Borrower and all others who may become liable for all or any part of this
obligation, hereby agree to be jointly and severally bound, and jointly and
severally waive and renounce presentment, protest, demand and notice of dishonor
and any and all lack of diligence or delays in collection or endorsement hereof,
and expressly consent to any extension of time, release of any party liable for
this obligation or any guaranty of this obligation, release of any security
which may have been or which may hereafter be granted in connection herewith or
any guaranty of this obligation, or any other indulgence or forbearance which
may be made without notice to said party and without in any way affecting the
liability of such party.
Nothing contained herein nor in any transaction related hereto shall be
construed or shall so operate either presently or prospectively (a) to require
the payment of interest at a rate greater than is now lawful in such case to
contract for, but shall require payment of interest only to the extent of such
lawful rate or (b) to require the payment or the doing of any act contrary to
law; but if any clause or provision herein contained shall otherwise so operate
to invalidate this Note and/or the transaction related hereto, in whole or in
part, then such clause(s) and provision(s) only shall be held for naught as
though not contained herein and the remainder of this Note shall remain
operative and in full force and effect.
If for any reason interest in excess of the amount as limited in the
foregoing paragraph shall have been paid hereunder, whether by reason of
acceleration or otherwise, then in that event any such excess interest shall
constitute and be treated as a payment of principal hereunder and shall operate
to reduce such principal by the amount of such excess, or if in excess of the
then principal indebtedness, such excess shall be refunded.
The rights and remedies of Lender as provided in this Note or any document
securing this Note shall be cumulative and concurrent, and may be pursued
singly, successively or together against Borrower, any guarantor of these
obligations or any security for the debt evidenced by this Note, at the
discretion of Lender.
The Borrower agrees that if, and as often as, this Note is placed in the
hands of an attorney for collection, to defend or enforce any of the Lender's
rights hereunder or under any document securing this Note, whether or not
litigation is commenced, Borrower shall pay to Lender its reasonable attorneys'
fees, together with all court costs and other expenses which may be incurred or
paid by Lender in connection therewith.
Failure to exercise any right or option herein given to Lender shall not
constitute a waiver of the right to exercise the same at a later time or upon
the occurrence of any subsequent event permitting such exercise.
This agreement shall be governed by the internal laws of the state of the
principal place of business of the Borrower.
This Note may not be changed, modified, amended or terminated orally, but
may only be changed, modified, amended or terminated by an agreement in writing
signed by both Borrower and Lender, except that this paragraph may not be
changed, modified, amended or terminated under any circumstance.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed by its
duly authorized officer as of the date first above written.
FIRST CHOICE AUTO FINANCE, INC.
a FLORIDA Corporation
By: /s/ Richard Todd
-----------------------
Name: Richard Todd
Title: V.P. Special Projects
Acknowledged by:
/s/ Richard Todd
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