1
EXHIBIT 10.26
LINE OF CREDIT
PROMISSORY NOTE
$9,000,000.00 San Antonio, Texas ___________________
1. FOR VALUE RECEIVED, the undersigned, EUROSTAR PERFUMES, INC.,
a Texas corporation (hereinafter "MAKER"), hereby promises to pay to TRANSVIT
MANUFACTURING CORPORATION, a Panamanian corporation (hereinafter "LENDER"
including subsequent holder(s) hereof), at its offices at P. O. Box 246, 1211
Geneva 12, Switzerland, or at such other place as the Lender may from time to
time designate in writing in lawful money of the United States of America, the
principal sum of Nine Million and No/100 Dollars ($9,000,000.00) or, if less,
the aggregate unpaid principal amount of all advances made by the Lender to the
undersigned from the date hereof, together with interest on the unpaid
principal balance from time to time outstanding until maturity (by acceleration
or otherwise) at the rate calculated on the basis of actual days elapsed, but
computed as if each calendar year consisted of 365 days. All advances and
repayments under this Note, shall be noted on a grid sheet, either attached to
or associated with this Note, and made a part hereof.
2. Interest on this Note shall accrue at the rate of four and
one-half percent (4.5%) per annum (the "Note Rate"). Interest on payments past
due shall accrue at the rate of five percent (5%) per annum above the Note Rate
established herein.
3. Payments of this Note shall be as follows:
a. Maker shall make annual payments of interest only on
August 1st of each year prior to maturity of this
Note.
b. This Note shall be due and payable in full on July
31, 1996 and on such date Maker shall be required to
pay Lender the entire outstanding principal balance
of the Note plus all accrued unpaid interest.
4. Regardless of any provision contained in this Note or any
other instrument executed in connection herewith, the Lender shall never be
entitled to receive, collect, or apply, as interest on this Note, any amount in
excess of the maximum rate of interest permitted to be charged from time to
time by applicable law (the "Maximum Rate"); and, in the event Lender ever
receives, collects, or applies as interest, any such excess, such amount which
would be excessive interest shall be deemed a partial prepayment of principal
and treated hereunder as such, and if this Note is paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Maximum
Rate. Maker and Lender shall to the maximum extent permitted under applicable
law: (a) characterize any non-principal payment as an expense, fee, or premium,
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread, in equal parts, the
total amount of interest through the entire contemplated term of this Note so
that the interest rate is uniform throughout the entire contemplated term of
this Note provided, that if this Note is paid and performed in full prior to
the full contemplated
2
term hereof, and if the interest received for the actual period of existence
hereof exceeds the Maximum Rate, Lender shall refund to Maker the amount of
such excess, and in such event Lender shall not be subject to any penalties
provided by any laws for contracting for, charging, or receiving interest in
excess of the Maximum Rate. The parties hereto intend to conform strictly to
the applicable usury laws. In no event, whether by reason of acceleration of
the maturity hereof or otherwise, shall the amount paid or agreed to be paid to
Lender for the use, forbearance or detention of money hereunder, or otherwise,
exceed the maximum amount permissible under applicable law. If a form of any
provision hereof, or of any mortgage, loan agreement, or other document now or
hereafter evidencing, securing or pertaining to the indebtedness evidenced
hereby at the time of performance of such provision shall be due, would involve
transcending the limit of validity prescribed by law, then the obligation to be
fulfilled shall be reduced automatically to the limit of such validity.
5. This Note is prepayable in part or in full at any time or from
time to time at the option of Maker. This Note may be prepaid without notice
of prepayment or the imposition of any prepayment penalty.
6. If an event of default shall occur hereunder, or if this Note
is placed in the hands of an attorney for collection, or if it is collected
through any legal proceedings, Maker agrees to pay the court costs, reasonable
attorneys' fees, and all other costs of collection of Lender.
7. Maker waives presentment and demand for payment, protest,
notice of protest and nonpayment, and notice of the intention to accelerate and
the acceleration of all indebtedness, and agrees that its liability under this
Note shall not be affected by any renewal or extension in the time of payment
hereof, by any indulgences or by any release or change in any security for the
payment of this Note, regardless of the number of such renewals, extensions,
indulgences, releases or changes.
Executed to be effective the date, month and year first above stated.
MAKER:
-----
EUROSTAR PERFUMES, INC.
A TEXAS CORPORATION
By:
-----------------------------------
Name: Viren Sheth
Title: President