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Exhibit 2
PROMISSORY NOTE
$750,000.00 April 22, 1999
Philadelphia, Pennsylvania
FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND HEREBY, the
undersigned (each jointly and severally if more than one person and herein
referred to and obligated as "Debtor") promises to pay to the order of THE
HERSHHORN GROUP ("Bank") at its offices in Philadelphia, Pennsylvania, or at any
other location that Bank may designate, in lawful money of the United States,
the Principal sum of Seven hundred fifty thousand---and---00/100 Dollars, or
such lesser amount which may be advanced to Debtor by Bank in its sole and
absolute discretion, which shall, if not sooner paid, be payable on October 9,
1999. Interest shall accrue from the date of the first draw on the unpaid
principal balance outstanding, from time to time, at the rate of 4% above the
prime rate of interest of National City Bank of Ohio (as defined below).
Interest shall be payable monthly commencing May 1, 1999, and thereafter on the
same day of each succeeding month.
SECURITY INTEREST: Debtor hereby grants to Bank a lien on and security interest
in and to all property of Debtor, except the stock of the subsidiaries of
Fix-Corp International, Inc., as security for the prompt payment as and when due
of all amounts owing under this Note, including any renewals, extensions and/or
modifications thereof, together with all other existing and future liabilities
and obligations of Debtor to Bank (including without limitation any debt,
liability or obligation owing from Debtor to others which Bank may obtain by
assignment or otherwise) and out of whatever transactions arising (herein
collectively called the "Obligations") . This lien and security interest
includes, without limitation, any balance or share belonging to Debtor of any
deposit, agency, trust, escrow or other account with Bank, and any other amounts
which may be owing from time to time by Bank to Debtor. The lien of the security
interest granted by Debtor shall be subordinate to the liens of Coast Business
Credit and Medalian Capital, Inc.
INTEREST ACCRUAL - Interest shall be calculated hereunder for the actual number
of days that the principal is outstanding, based on a year of three hundred and
sixty-five (365) days, unless otherwise specified. If interest is calculated by
Bank's prime rate of interest, the term "prime rate of interest" shall mean that
rate of interest charged by National City Bank of Ohio, from time to time, as
its prime rate of interest, which may not be the lowest rate of
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National City's prime rate of interest shall become effective on the day that
National City enters the change on its books. Interest shall continue to accrue
on the principal at the rate(s) specified above notwithstanding any demand for
payment, acceleration and/or the entry of judgment against Debtor, until all
principal has been paid in full.
PREPAYMENTS - Unless otherwise agreed to in writing by Debtor, this Note may be
prepaid, in whole or in part, without penalty. However, if this Note is payable
in installments, any prepayment shall be applied to the installments payable
hereunder in their inverse order of maturity (last installment due credited
first) and the number of installments shall be correspondingly reduced. No
prepayment shall reduce the amount of or relieve Debtor from paying any
scheduled installment until the principal and interest of this Note has been
paid in full.
LATE PAYMENTS - If any payment of principal or interest is not received in full
by Bank within fifteen (15) days after the due date thereof, there shall be
added to the Obligations a late charge equal to four (4%) percent of the amount
past due.
EVENTS OF DEFAULT - Each of the following shall constitute an "Event of
Default": (1) the nonpayment when due of any amount payable under this Note or
of any amount when due under or on any of the Obligations, or the failure of
Debtor to observe or perform any agreement of any nature whatsoever with Bank;
of (2) any information or signature furnished to Bank by Debtor in connection
with any of the Obligations is materially false or incorrect.
BANK'S RIGHTS UPON DEFAULT - Upon the occurrence of any Event of Default, and
upon the giving of five (5) days prior written notice to Debtor, Bank may do any
or all of the following: (1) Accelerate the maturity of this Note and all
amounts payable hereunder and demand immediate payment thereof; (2) Exercise all
of the rights and remedies of a secured party under the Ohio Uniform Commercial
Code (or under the laws of any other jurisdiction in which any collateral
security for the Obligations may be located), and all of its rights and remedies
under any security agreement, pledge agreement, mortgage, power, or other
document issued in connection with or arising out of or relating to any of the
Obligations (the "Loan Documents") .
APPLICATION OF FUNDS - All sums realized by Bank on account of the Obligations,
from whatever source received, shall be applied first to any fees and expenses
(including attorneys' fees) incurred by Bank, second to accrued and unpaid
interest and late charges, and then to principal. Debtor waives and releases any
right to require
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Bank to collect any of the Obligations from any collateral under any theory of
marshalling of assets or otherwise. Debtor authorizes Bank to apply the proceeds
of any collateral in which Obligor has any right, title or interest against any
of the Obligations in any manner or order that Bank may determine.
PAYMENT OF COSTS AND ATTORNEYS' FEES - Debtor shall be liable, and shall
reimburse Bank on demand, for all attorneys' fees and expenses incurred by Bank
in the event that Bank engages an attorney to represent it in connection with
(1) any alleged default by Debtor under any of the Loan Documents issued in
connection with or arising out of any of the Obligations, (2) the enforcement of
any of the Bank's rights and remedies under any of the Loan Documents, (3) any
potential and/or actual bankruptcy or other insolvency proceedings commenced by
or against Debtor and/or (4) any potential and/or actual litigation arising out
of or related to any of the foregoing, the Loan Documents or any of the
Obligations. Debtor shall also be liable and shall reimburse Bank on demand for
all other costs and expenses incurred by Bank in connection with the collection,
preservation and/or liquidation of any collateral security for any of the
Obligations and/or in the enforcement of Debtor's obligations under any of the
Loan Documents.
MISCELLANEOUS - Debtor hereby waives protest, notice of protest, presentment,
dishonor, notice of dishonor and demand. To the extent permitted by law, Debtor
hereby waives and releases all errors, defects and imperfections in any
proceedings instituted by Bank under the terms of this Note. The rights and
privileges of Bank under this Note shall inure to the benefit of its successors
and assigns. All representations, warranties and agreements of Debtor made in
connection with this Note shall bind Debtor's personal representatives, heirs,
successors and assigns. If any provision of this Note shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision hereof, but this Note shall be construed as if
such invalid or unenforceable provision had never been contained herein. The
waiver or failure of Bank to exercise any right or remedy to which it may be
entitled in any Event of Default shall not be deemed to be a waiver in any
subsequent Event of Default. The rights and remedies of Bank under this Note and
the other Loan Documents shall be in addition to any other rights and remedies
available to Bank at law or in equity, all of which may be exercised singly or
concurrently. This Note has been delivered to and accepted by Bank in Ohio and
shall be governed by the laws of that State. The parties agree to the exclusive
jurisdiction of the federal and state courts located in Ohio in connection with
any matter arising hereunder, including the collection and enforcement hereof,
except as Bank may otherwise elect.
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IN WITNESS WHEREOF, Debtor has duly executed this Note the day and year
first above written and has hereunto set hand and seal .
FIX-CORP INTERNATIONAL, INC. ATTEST:
By: /s/ James L. Trichon /s/ M???
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[SEAL]
PALLET TECHNOLOGY, INC. ATTEST:
By: /s/ James L. Trichon /s/ M???
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[SEAL]
POLYSTYLE INDUSTRIES, INC. ATTEST:
By: /s/ James L. Trichon /s/ M???
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[SEAL]
FIXCOR INDUSTRIES, INC. ATTEST:
By: /s/ James L. Trichon /s/ M???
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[SEAL]
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