Exhibit 10.19
THIS INSTRUMENT IS SUBORDINATE TO CERTAIN SENIOR OBLIGATIONS OF THE MAKER TO
BANK ONE INDIANA, NATIONAL ASSOCIATION AND SUBJECT TO A SUBORDINATION AGREEMENT
EXECUTED BY THE HOLDER IN FAVOR OF BANK ONE INDIANA, NATIONAL ASSOCIATION,
SUBORDINATED SECURED PROMISSORY NOTE
$1,750,000.00 December 29, 2000
FOR VALUE RECEIVED, on or before December 28, 2005, the undersigned, USRR
Acquisition Corp., an Indiana corporation ("Maker"), having its executive office
and principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, hereby promises to pay to SerVaas, Inc. an Indiana corporation ("Holder")
the principal sum of One Million Seven Hundred Fifty Thousand and no/l00 Dollars
($1,750,000.00) and to pay interest thereon as set forth herein.
This Subordinated Secured Promissory Note ("this Note") is given by Maker
as part of the purchase money consideration paid for the purchase of Holder's
shares in U.S. Rubber Reclaiming, Inc., as more fully set forth in that certain
Stock Purchase Agreement of this date, with Maker as "Buyer" and Holder as
"Seller," and Maker acknowledges the receipt, adequacy and sufficiency of the
consideration given for this Note. Repayment of this Note is secured by a Stock
Pledge Agreement given by Obsidian Capital Partners, LP ("OCP"), Maker's sole
shareholder, as is more fully set forth below.
1. Payment of Principal and Interest.
1.1 From the date of this Note until maturity, Holder shall make monthly
payments of interest on the outstanding principal balance. The
principal balance of this Note outstanding from time to time, and all
interest accrued thereon, shall bear interest at a rate per annum
equal to fourteen percent (14%) from the date of this Note until March
31, 2001 and at a rate of twenty percent (20%) thereafter through the
Maturity Date ("Interest Rate").
1.2 Interest shall be first due and payable on February 1, 2001 and on the
first day of each month thereafter.
1.3 The outstanding principal balance of this Note, together with all then
accrued and unpaid interest, shall be due and payable in full on the
Maturity Date.
1.4 If the date for the payment of any amount payable under this Note
falls due on a Saturday, Sunday or public holiday under the laws of
the United States of America or the State of Indiana, the time for
payment of such amount shall be extended to the next succeeding
business day and interest at the Interest Rate shall continue to
accrue on any principal amount so effected until the payment thereof
on such extended due date.
1.5 All payments hereunder shall be paid ,in immediately available United
States funds, without setoff or counterclaim, to Holder at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or to such other location
as Holder may direct in writing.
1.6 If any installment of interest due under this Note prior to maturity
is not paid in full when due, then the Maker may assess a late payment
fee in an amount equal to the greater of $25.00 per day or five
percent (5%) of the amount past due up to a maximum of $1,500.00 per
late charge. The failure of Holder to assess a late payment fee shall
not be construed as a waiver by Holder of its right to assess late
payment fees thereafter.
1.7 If any payment applied by Holder to this Note is subsequently set
aside, recovered, rescinded or otherwise required to be returned by
Holder for any reason (pursuant to bankruptcy proceedings, fraudulent
conveyance statutes, or otherwise), this Note shall be deemed to have
continued in existence, notwithstanding the application, and this Note
shall be enforceable as to the amount of such payment as fully as if
Holder had not received and applied the payment.
2. Prepayment. Maker may, at any time and from time to time, prepay all or any
part of the principal amount of this Note then outstanding, together with
all accrued interest owing with respect to such prepaid amount, without
premium or penalty, and provided further that all such prepayments shall
first be applied to any accrued interest owing and outstanding and then to
the principal outstanding.
3. Subordination. Maker covenants and agrees, and Holder, by its acceptance
hereof, covenants and agrees for itself, its successors and assigns, that
the indebtedness evidenced by this Note is subordinate in right of payment
and action to all obligations of Maker to certain Senior Obligations of
Maker to Bank One Indiana, National Association, to the extent and in the
manner set forth in that certain Subordination Agreement of even date
herewith, as same may be amended from time to time (the "Subordination
Agreement").
4. Events of Default. The occurrence of any of the following events shall
constitute an "Event of Default" hereunder:
4.1 Maker fails to pay any installment of interest or principal on this
Note when due, or defaults in other commitments or obligations of
Maker to Holder, as and when the same becomes due and payable, and
said default is not cured within three (3) business days after receipt
of written notice from Holder to Maker to cure such default.
4.2. OCP's default in the observance or performance of any covenant,
condition or agreement on its part to be observed or performed under
the Stock Pledge Agreement and the continuance of such default for a
period of three (3) business days after written notice thereof from
Holder to OCP.
5. Remedies Upon an Event of Default. Subject to the terms and conditions of
the Subordination Agreement, upon the occurrence and during the
continuation of an Event of Default, Holder shall have the right to declare
in a writing delivered to Maker in accordance that the principal of and
accrued unpaid interest on this Note shall be immediately due and payable
to Holder without presentment, demand, protest, notice of protest, notice
of nonpayment, dishonor or other notice of any kind, all of which are
hereby expressly waived.
6. Suits for Enforcement and Remedies. Subject to the terms and conditions of
the Subordination Agreement, if any one or more Events of Default shall
occur and be continuing, Holder may proceed to (a) protect and enforce
Holder's rights either by suit in equity or by action at law, or both,
whether for the specific performance of any covenant, condition or
agreement contained in this Note or in any agreement or document referred
to herein or in aid of the exercise of any power granted in this Note or in
any agreement or document referred to herein, (b) enforce the payment of
this Note, (c) proceed to exercise the rights granted to it pursuant to the
Stock Pledge Agreement, or (d) enforce any other legal or equitable right
available to it. Maker shall pay all of Holder's costs, including
attorney's fees, incurred in collecting any payment due under this Note.
7. Security for Note. Maker's obligations hereunder are secured by a certain
Stock Pledge Agreement of even date herewith, between Holder and Obsidian
Capital Partners, L. P., an Indiana limited partnership ("OCP") wherein OCP
has pledged to Holder all of the capital stock of Maker owned by OCP to
secure Maker's obligations hereunder until such time as the Note is paid in
frill.
8. Waivers. Maker waives demand, presentment, notice of dishonor and protest
and consents to any extension or postponement of the time for payment and
any renewal of this Note or indulgences granted by Holder with respect to
enforcement of its terms. Maker hereby waives all rights under any statute
of limitations and any other formality in connection with this Note. No
delay on the part of Holder in the exercise of any right or remedy shall
operate as a waiver. No single or partial exercise by Holder of any right
or remedy shall preclude any other future exercise of that right or remedy
or the exercise of any other right or remedy. Acceptance of partial or late
payments owing on this Note at all times shall not be deemed a waiver of
any default. All amounts payable under this Note shall be payable without
relief from valuation and appraisement laws.
9. Miscellaneous.
9.1. All notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when personally
delivered or sent by registered or certified mail (return receipt
requested, postage prepaid), facsimile transmission or overnight
courier to the address of the intended recipient as set forth in the
preamble of this Note or at such other address as the intended
recipient shall have hereafter given to the other party hereto
pursuant to the provisions of this Note.
9.2 The person signing this Note on behalf of the Maker warrants to Holder
that he is duly and properly authorized to execute this Note.
9.3 If any provision hereof shall be declared invalid or illegal, it shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of the provision or the remaining
provisions of this Note.
9.4 This Note and the obligations of Maker and the rights of Holder shall
be governed by and construed in accordance with the laws of the State
of Indiana without regard to principles of conflict of laws.
This Note is executed and delivered to Maker at Indianapolis, Indiana.
USRR Acquisition Corp.
"Maker"
By: _________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Secretary