exv10w19



 





Exhibit 10.19



Customer No.

Loan No.



    	 	 	 
	RBC Centura
            
	 	Commercial Promissory Note
	
	 	(SD-L&S)







    	 	 	 
	$25,000,000
          
	 	Norfolk, Virginia

	 	 	 
	Master
            Note 
	 	November 28, 2003







FOR VALUE RECEIVED, the undersigned (whether one or more, “Borrower”) promises
to pay to RBC CENTURA BANK (“Bank”), or order, the sum of Twenty-five Million
Dollars ($25,000,000), or so much thereof as shall have been disbursed from
time to time and remains unpaid, together with interest at the rate and payable
in the manner hereinafter stated. Principal and interest shall be payable at
any banking office of Bank in the city or town indicated above, or such other
place as the holder of this Note may designate.


  
Article I. Interest Rate.
  
Section 1.1. Rate of Accrual. Interest will accrue on the unpaid
principal balance at the rate set forth in Section 1.2.1. until maturity of
this Note, whether such maturity occurs by acceleration or on the Maturity
Date; and, at Bank’s option, interest at the foregoing rate will accrue on any
unpaid interest before such maturity. Interest will accrue on any unpaid
balance owing under this Note, whether principal, interest, fees, premiums,
charges or costs and expenses, after maturity at the rate set forth in Section
1.2.2. All accrual rates of interest under this Note will be contract rates of
interest, whether a pre-default rate or a default rate, and references to
contract rates in any loan documents executed and delivered by Borrower or
others to Bank in connection with this Note shall be to such contract rates.



Section 1.2. Interest Rates.




     1.2.1. Pre-Default Rate. Subject to the provisions of Section
1.2.2. below, interest payable on this Note per annum will accrue at a variable
rate equal to the LIBOR Base Rate plus 2.50%. The “LIBOR Base Rate” is the
London Interbank Offer Rate for United States Dollars for a term of one month
which appears on Telerate Page 3750, Bloomberg Professional Screen BBAM (or any
generally recognized successor method or means of publication) as of 11:00
a.m., London time, two (2) London business days prior to the day on which the
rate will become effective. The rate for the first month or part thereof will
initially become effective on the date of the Note as shown on the face hereof.
Thereafter, the rate will change and a new rate will become effective on the
first calendar day of each succeeding month. If for any reason the London
Interbank Offer Rate is not available, then the “LIBOR Base Rate” shall mean
the rate per annum which banks charge each other in a market comparable to
England’s Eurodollar market on short-term money in U.S. Dollars for an amount
substantially equivalent to the principal amount due under this Note as
determined at 11:00 A.M., London time, two (2) London business days prior to
the day on which the rate will become effective, as determined in the Bank’s
sole discretion. Bank’s determination of such interest rate shall be
conclusive, absent manifest error.



     1.2.2. Default Rate. Upon the nonpayment of any payment of interest
described herein, Bank, at its option and without accelerating this Note, may
accrue interest on such unpaid interest at a rate per annum (“Default Rate”)
equal to the lesser of the maximum contract rate of interest that may be
charged to and collected from Borrower on the loan evidenced by this Note under
applicable law or five percent (5.0%) plus the pre-default interest rate
otherwise applicable hereunder, as set forth in Section 1.2.1.. After maturity
of this Note, whether by acceleration or otherwise, interest will accrue on the
unpaid principal of this Note, any accrued but unpaid interest



 









 




and all fees, premiums, charges and costs and expenses owing hereunder at
the Default Rate until this Note is paid in full, whether this Note is paid in
full pre-judgement or post-judgement.




     1.2.3. Variable Rate; Calculation of Interest.



          1.2.3.1. Variable Rate. This is a variable rate note. Any change
in the rate of interest payable under this Note will equal the change in the
variable rate index to which such rate is tied, but the rate at which interest
accrues under this Note shall never exceed the maximum contract rate which may
be charged to and collected from Borrower on the loan evidenced by this Note
under applicable law. Bank shall have no obligation to notify Borrower of
adjustments in the rate of interest payable under this Note. Adjustments to
the rate of interest will be effective on the first day of the calendar month
next following any change in the variable rate index, with the rate being
adjusted to reflect the most recent change in the variable rate index.



          1.2.3.2. Calculation of Interest. All interest payable under this
Note shall be calculated monthly and will accrue daily on the basis of the
actual number of days elapsed and a year of three hundred sixty (360) days.
In computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be included
unless repayment is credited prior to close of business. Payments in federal
funds, immediately available in the place designated for payment, received by
Bank prior to 2:00 p.m. local time at said place of payment, shall be credited
as if received prior to close of business on the day the funds are immediately
available; while other payments, at the option of Bank, may not be credited
until such payments are immediately available to Bank, in federal funds, in the
place designated for payment, prior to 2:00 p.m. local time at said place of
payment on a day on which Bank is open for business.



Article II. Payment Terms.


Section 2.1. Interest Payment Terms. Payments under this Note include
an interest component and a principal component. The principal component is set
forth in Section 2.2 below. The interest component shall be paid as follows:
interest shall be payable monthly, in arrears, beginning January 1, 2004 and
continuing on the same calendar day of each consecutive month thereafter until
the Maturity Date, when all accrued but unpaid interest is due and payable in
full.



Section 2.2. Principal Payment Terms; Maturity Date. As stated in
Section 2.1 above, payments under this Note include an interest component and a
principal component. The interest component is set forth in Section 2.1 above.
The principal component shall be paid as follows: principal shall be payable
in one single payment on November 28, 2005 (herein referred to as the “Maturity
Date”). The Maturity Date may be extended by the Bank as follows: Bank shall
review the Maturity Date annually, and shall notify Borrower on or before each
anniversary of this Note only if it intends to extend the Maturity Date to a
date which is one year beyond the then current Maturity Date.



Section 2.3. Prepayment. This Note may be prepaid in whole, or in part
at any time without any prepayment premium.



Section 2.4. Application of Payments. All payments made on this Note
shall be applied first to payment of all late fees, charges, premiums and costs
and expenses due but unpaid under this Note, then to accrued but unpaid
interest and finally to principal, in the inverse order of the payment dates
therefor, unless Bank determines in its sole discretion to apply payments in a
different order or applicable law requires a different application of payments.
The partial prepayment of this Note, if permitted, shall not result in a
payment holiday or any other deferral of any regularly scheduled payments under
this Note, all of which shall be made as and when the same are scheduled to be
paid.




 









 





Article III. Loan Agreement and Security.


Section 3.1. Loan Agreement. Borrower and Bank have entered into a loan
and security agreement of even date herewith (“Loan and Security Agreement”).
Borrower shall perform and abide by, as and when so required, each and all of
the covenants, terms and conditions imposed upon or applicable to Borrower in
the Loan and Security Agreement and all security documents and other agreements
referenced in the Loan and Security Agreement.



Section 3.2. Security Documents. This Note is secured by (1) the Loan
and Security Agreement, (2) the security documents and other supporting
obligations identified in the Loan and Security Agreement, (3) the security
documents and other supporting obligations which reference that they secure
this Note or the Loan and Security Agreement, (4) any security documents and
other supporting obligations which reference that they secure all indebtedness
or other obligations owing from time to time by Borrower to Bank, and (5) any
security documents and other supporting obligations which reference that they
secure all indebtedness from time to time owing from Borrower to Bank other
than consumer credit as defined under the Federal Reserve Board’s Regulation Z
(Truth-in-Lending) (12 CFR 226 et seq.) (“security documents”).




Article IV. Default and Acceleration.


Section 4.1. Late Charges and Expenses. Borrower agrees to pay, upon
demand by Bank, or if demand is not sooner made, on maturity of this Note,
whether such maturity occurs by acceleration or on the Maturity Date, for each
payment past due for fifteen (15) or more calendar days, a late charge in an
amount equal to the lesser of (1) four percent (4%) of the amount of the
payment past due or (2) the maximum percentage of the payment past due
permitted by applicable law, or the maximum amount if not expressed as a
percentage. If this Note is not paid in full whenever it becomes due and
payable, Borrower agrees to pay all costs and expenses of collection, including
reasonable attorneys’ fees. The Borrower hereby stipulates that reasonable
attorneys’ fees shall be fifteen percent (15%) of the outstanding balance
(principal, interest, fees, premiums, charges and costs and expenses) owing
under this Note after default and, if applicable law prohibits payment of
attorneys’ fees when collection is through an attorney who is a salaried
employee of Bank, referral to an attorney not a salaried employee of the Bank.



Section 4.2. Default. Any one or more of the following shall constitute
an event of default (“Event of Default”) under this Note: (1) the failure of
Borrower to make when due any payment described herein, whether of principal,
interest or otherwise; (2) the failure of Borrower to perform any of the other
terms and conditions of this Note or any of the terms and conditions of the
Loan and Security Agreement or the other security documents executed and
delivered by Borrower to Bank, or to another person for Bank’s benefit, as and
when the same are required to be so performed, or the occurrence of some other
default by Borrower under this Note, the Loan and Security Agreement or any of
the other security documents; (3) the failure of any other person obligated for
the payment of this Note, either directly or indirectly, or obligated under the
Loan and Security Agreement or any of the other security documents to perform
any of the terms and conditions imposed upon such other person by any of said
agreements or documents, as and when the same are required to be so performed,
or the occurrence of some other default by such other person under any of said
agreements or security documents; (4) the application for the appointment of a
receiver for Borrower or the filing of a petition under any provisions of the
United States Bankruptcy Code or other state or federal insolvency proceeding
by or against Borrower or any assignment for the benefit of creditors by or
against Borrower; (5) if Borrower is an individual, Borrower’s death, physical
disability or mental incompetency, and if Borrower is not an individual, the
dissolution, termination of existence, merger or change in control of or in
Borrower; (6) the failure of Borrower to furnish from time to time, at Bank’s
request, financial information with respect to Borrower; (7) the occurrence, in
Bank’s opinion, of a material adverse change in Borrower’s business or
financial condition, or if, in Bank’s opinion, there is an impairment of the
prospect of repayment of any portion of this Note or an impairment of the value
or priority of Bank’s security interests in any collateral securing repayment
of this Note; (8) the failure of Borrower to perform or other default by
Borrower under any other now existing or hereafter arising monetary or
non-monetary obligation due, owing or otherwise required to be performed or
observed by Borrower to or in favor of Bank, or if Borrower is not an
individual, default by any subsidiary of Borrower under any indebtedness or
other obligation now or hereafter owing by such subsidiary to Bank; or (9) the
termination of any guaranty agreement or other supporting obligation (inclusive
of letters of credit) which applies to this Note or any other security document
which applies to this Note.




 









 




Section 4.3. Acceleration. Upon the occurrence of an Event of Default,
or the occurrence of an event which, with the giving of notice or a lapse of
time, or both, would become an Event of Default under this Note, (1) the entire
unpaid principal balance of this Note, together with all other amounts owing
and all other amounts to be owing under this Note, shall, at the option of
Bank, become immediately due and payable, without notice or demand, and (2) the
Bank may, both before and after acceleration, exercise any of and all of its
other rights and remedies under this Note and the other loan documents, as well
as any additional rights and remedies it may have at law and it may have in
equity, to recover full payment of the balance (principal, interest, fees,
premiums, charges and costs and expenses) owing under this Note. The failure
by Bank to exercise any of its options shall not constitute a waiver of the
right to exercise same in the event of any subsequent default.




Article V. Miscellaneous.


Section 5.1. Use and Application of Terms. To the end of achieving the
full realization by Bank of its rights and remedies under this Note, including
payment in full of the loan evidenced hereby, in using and applying the various
terms, provisions and conditions in this Note, the following shall apply: (1)
words in the masculine gender mean and include correlative words of the
feminine and neuter genders and words importing the singular numbered meaning
include the plural number, and vice versa; (2) words importing persons include
firms, companies, associations, general partnerships, limited partnerships,
limited liability partnerships, limited liability limited partnerships, limited
liability companies, trusts, business trusts, corporations and legal entities,
including public and quasi-public bodies, as well as individuals; (3) the term
“Note” refers to this Commercial Promissory Note, the term “loan document”
refers to this Note, the Loan and Security Agreement and any security documents
and other documents and agreements executed and delivered to Bank or others on
Bank’s behalf in connection with this Note, and the term “Borrower” refers to
all signatories of this Note collectively and severally, as the context of this
Note requires, and all signatories of this Note shall be and the same are
jointly and severally liable hereunder; (4) as the context requires, the word
“and” may have a joint meaning or a several meaning and the word “or” may have
an inclusive meaning or an exclusive meaning; (5) the term “subsidiary” means
any registered organization or other organization (i) the majority (by number
of votes) of the outstanding voting interests of which is at the time owned or
controlled by Borrower, or by one or more subsidiaries of Borrower, or Borrower
and one or more subsidiaries of Borrower, or (ii) otherwise controlled by or
within the control of Borrower or any subsidiary; (6) the Commitment Letter and
the other loan documents shall be applied and construed in harmony with each
other to the end that Bank is ensured repayment of the loan evidenced by this
Note in accordance with the terms of this Note and such other loan documents,
and this Note and the other loan documents shall not be applied, interpreted
and construed more strictly against a person because that person or that
person’s attorney drafted this Note or any of the other loan documents; (7)
Bank does not intend to and shall not reserve, charge or collect interest, fees
or charges hereunder in excess of the maximum rates or amounts permitted by
applicable law and if any interest, fees or charges are reserved, charged or
collected in excess of the maximum rates or amounts, it shall be construed as a
mutual mistake, appropriate adjustments shall be made by Bank and to the extent
paid, the excess shall be returned to the person making such a payment; and (8)
wherever possible each provision of this Note shall be interpreted and applied
in such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under such law, or the
application thereof shall be prohibited or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Note, or the application thereof shall be in a manner and to
an extent permissible under applicable law.



Section 5.2. Documentary and Intangibles Taxes. To the extent not
prohibited by law and notwithstanding who is liable for payment of the taxes
and fees, Borrower shall pay, on Bank’s demand, all intangible personal
property taxes, documentary stamp taxes, excise taxes and other similar taxes
assessed, charged or required to be paid in connection with the loan evidenced
by this Note, or any extension, renewal or modification of such loan, or
assessed, charged or required to be paid in connection with any of the loan
documents.



Section 5.3. Maintenance of Records by Bank. Bank is authorized to
maintain, store and otherwise retain the loan documents in their original,
inscribed tangible forms or records thereof in an electronic medium or other
non-tangible medium which permits such records to be retrieved in perceivable
forms.




 









 




Section 5.4. Right of Set-off; Recoupment. Upon the occurrence of an
Event of Default, or the occurrence of an event which, with the giving of
notice or a lapse of time, or both, would become an Event of Default under this
Note, or upon demand by Bank for payment of this Note, Bank is authorized and
empowered to apply to the payment hereof, any and all money deposited in Bank
in the name of or to the credit of Borrower, without advance notice, and is
authorized to offset any obligation of Bank to Borrower to the payment hereof
and is authorized to exercise its rights of recoupment relative to Borrower.



Section 5.5. Waiver. Borrower waives presentment, demand, protest and
notice of dishonor, waives any rights which it may have to require Bank to
proceed against any other person or property, agrees that without notice to any
person and without affecting any person’s liability under this Note, Bank, at
any time or times, may grant extensions of the time for payment or other
indulgences to any person or permit the renewal, amendment or modification of
this Note or any other agreement executed and delivered by any person in
connection with this Note, or permit the substitution, exchange or release of
any security for this Note and may add or release any person primarily or
secondarily liable, and agrees that Bank may apply all moneys made available to
it from any part of the proceeds from the disposition of any security for this
Note either to this Note or to any other obligation of Borrower to Bank, as
Bank may elect from time to time. No act or inaction of Bank under this Note
shall be deemed to constitute or establish a “course of performance or dealing”
that would require Bank to so act or refrain from acting in any particular
manner at a later time under similar or dissimilar circumstances.



Section 5.6. Jury and Jurisdiction. This Note shall be deemed to have
been executed and delivered in the Commonwealth of Virginia regardless of where
the signatories may be located at the time of execution and shall be governed
by and construed in accordance with the substantive laws of the Commonwealth of
Virginia, excluding, however, the conflict of law and choice of law provisions
thereof. Borrower, to the extent permitted by law, waives any right to a trial
by jury in any action arising from or related to this Note.



Section 5.7. Successors and Assigns. This Note shall apply to and bind
Borrower’s and Bank’s heirs, personal representatives, successors and assigns.
All references in this Note to Bank shall include the holder hereof and this
Note shall inure to the benefit of any holder, its successors and assigns; and,
Borrower waives and will not assert against any transferee or assignee of this
Note any claims, defenses, set-offs or rights of recoupment which Borrower
could assert against Bank, except defenses which Borrower cannot waive.
Borrower acknowledges that Customer Numbers and Loan Numbers may be added to
this Note after execution and delivery of this Note by Borrower and if there is
a section denoted “BANK USE ONLY”, the information under such section may also
be completed by Bank after execution and delivery of this Note. In addition, in
the event the date of this Note is omitted, Borrower consents to Bank inserting
the date.



Section 5.8. Master Note. If this Note is designated herein as a MASTER
NOTE or is denoted on Bank’s records as a MASTER NOTE, then this Note evidences
a line of credit and Borrower shall be liable for only so much of the principal
amount as shall be equal to the total of the amounts advanced to or for
Borrower by Bank from time to time, less all payments made by or for Borrower
and applied by Bank to principal, and for interest on each such advance, fees,
premiums, charges and costs and expenses incurred or due hereunder, all as
shown on Bank’s books and records which shall be conclusive evidence of the
amount owed by Borrower under this Note, absent a clear and convincing showing
of bad faith or manifest error. If this is a MASTER NOTE, on demand for
payment of this Note, in whole or in part or upon the occurrence of an Event of
Default or the occurrence of an event which, with the giving of notice or a
lapse of time, or both, would become an Event of Default under this Note, in
addition to its other rights and remedies, Bank may terminate or suspend
Borrower’s right to receive any future or additional advances under this Note
and the other loan documents.




(Signatures Begin on the Next Page)




 









 







The undersigned has executed this Note as of the day and year first above
stated.




    	 	 	 	 	 
	PORTFOLIO
            RECOVERY ASSOCIATES, INC
	 	 
	 	 	 	 
	By:   
          
	 	 	Witness:	 
	 	
	 	 
	Print
            Name: 
	 	 	 

	 	
	 	 	 
	Title:
                
	 	 	Print Name: 	 
	 	
	 	 	








#864519 v2 — Promissory Note/RBC Centura/Portfolio Recovery Associates




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