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RTS had purchased the telecommunications equipment in part
with a loan of $3,239,620 from MHLC. RTS borrowed that sum from
MHLC pursuant to an agreement entitled "Loan and Security
Agreement" (the loan agreement). Pursuant to the loan agreement,
RTS executed a promissory note (the RTS promissory note) to MHLC.
The RTS promissory note is interest bearing and calls for
58 monthly payments of $81,420.95, commencing on December 1,
1982. Among other provisions, the RTS promissory note contains
the following statement:
MHLC ACKNOWLEDGES AND AGREES THAT THE PERSONAL
LIABILITY OF * * * [RTS] WITH RESPECT TO PAYMENT OF
SUMS EVIDENCED BY THIS NOTE IS LIMITED AND IS SUBJECT
TO THE TERMS AND CONDITIONS CONTAINED IN THE SECURITY
AGREEMENT.
Certain pertinent provisions of the loan agreement are as
follows:
7. Payment from Amounts Due Under The Lease. MHLC and
the Borrower agree that, except as otherwise provided
in Section 15 hereof, payments due under the Note shall
be made by the Lessee's payment of the rentals and
other amounts due or to become due (including, without
limitation amounts due as Stipulated Loss Value) under
the Lease directly to MHLC; provided, however, that
nothing contained herein shall be deemed to alter or
diminish the Borrower's absolute and unconditional
obligation to make the payments to MHLC required under
the terms of the Note.
* * * * * * *
14. Default; Remedies. In the event: (a) of a
failure of the Borrower to pay any amount owing
hereunder when due, and the continuation of such
failure for a period of 30 days after the date when
due; (b) of a failure by the Borrower to perform or
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