EXHIBIT 10.50
AMENDED AND RESTATED CONVERTIBLE TERM NOTE
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$2,500,000.00 May 17, 2000
FOR VALUE RECEIVED, on or before May 17, 2005 (the "Maturity Date"),
the undersigned and if more than one, each of them, jointly and severally
(hereinafter referred to as "Borrower"), promises to pay to the order of THE
XXXXXXXXX FOUNDATION ("Xxxxxxxxx") at its offices in 0000 Xxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000, the principal amount of TWO MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS ($2,500,000.00) (the "Total Principal Amount"),
together with interest at the rate set forth below.
1. Interest Rate. The unpaid principal amount of this Note shall bear
interest at a rate per annum which shall be equal to three percent (3%) plus the
Prime Rate (the "Contract Rate"); provided, however, in no event shall the
Contract Rate exceed the maximum rate allowed by applicable law. As used herein,
"Prime Rate" means, as of any date, the rate of interest quoted in the Wall
Street Journal as the "Prime Rate" for such date, provided that for any date for
which the Wall Street Journal is not published or does not publish a quote for
the "Prime Rate" such rate shall be the rate most recently published as the
"Prime Rate".
2. Repayment Terms. The principal of and all accrued but unpaid interest
on this Note (the "Loan") shall be due and payable as follows:
(a) interest shall be due and payable monthly as it accrues,
commencing on the 30th day of June, 2000 and continuing on the
last day of each successive month thereafter during the term
of this Note; and
(b) principal of the Loan shall be due and payable in one
installment of all unpaid principal and accrued unpaid
interest on May ___, 2005.
3. Prepayment Penalty. On or after the second anniversary of the date
hereof, Borrower may prepay the Loan in full or in part at any time prior to May
___, 2005, provided, that Borrower shall (i) give Xxxxxxxxx thirty (30) days'
written notice of Xxxxxxxx's intention to do so [and (ii) pay to Xxxxxxxxx, as
liquidated damages and not as a penalty, an amount equal to the twelve percent
(12%) multiplied by the principal amount of the Loan being prepaid at such time
--- In Previous Deal] .
4. Loan Documents. This Note is subject to the terms and conditions set
forth in that certain Amended and Restated Loan Agreement dated May ___, 2000,
by and between Borrower and Xxxxxxxxx, as may be amended from time to time (the
"Loan Agreement"). All capitalized terms used herein that are not otherwise
defined herein shall have the same meaning given to such terms in the Loan
Agreement. This Note, the Loan Agreement and all other documents evidencing,
securing, governing, guaranteeing and/or pertaining to this Note are hereinafter
collectively referred to as the "Loan Documents". The holder of this Note is
entitled to the benefits and security provided in the Loan Documents.
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5. Purpose. Xxxxxxxx agrees that no proceeds of the Loan under this Note
shall be used for personal, family or household purposes, and that the proceeds
of the Loan hereunder shall be used solely for business, commercial, investment
or other similar purposes.
6. Event of Default. Xxxxxxxx agrees that upon the occurrence of any one
or more of the following events of default ("Event of Default"):
(a) failure of Borrower to pay when due any installment of
principal of or interest on this Note or on any other
indebtedness now or hereafter owing by Borrower to Xxxxxxxxx,
or
(b) the occurrence of any event of default specified in any of the
other Loan Documents; or
(c) the bankruptcy or insolvency of, the assignment for the
benefit of creditors by, or the appointment of a receiver for
any of the property of, or the liquidation, termination,
dissolution or death or legal incapacity of Borrower;
the holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid interest
on this Note at once due and payable, (ii) foreclose all liens securing payment
hereof, (iii) pursue any and all other rights, remedies and recourse available
to the holder hereof, including but not limited to any such rights, remedies or
recourse under the other Loan Documents, at law or in equity, or (iv) pursue any
combination of the foregoing. The failure to exercise the option to accelerate
the maturity of this Note or any other right, remedy or recourse available to
the holder hereof upon the occurrence of an Event of Default hereunder shall not
constitute a waiver of the right of the holder of this Note to exercise the same
at that time or at any subsequent time with respect to such Event of Default or
any other Event of Default. The rights, remedies and recourse of the holder
hereof, as provided in this Note and in any of the other Loan Documents, shall
be cumulative and concurrent and may be pursued separately, successively or
together as often as occasion therefore shall arise, at the sole discretion of
the holder hereof. The acceptance by the holder hereof of any payment under this
Note which is less than the payment in full of all amounts due and payable at
the time of such payment shall not (i) constitute a waiver of or impair, reduce,
release or extinguish any right, remedy or recourse of the holder hereof, or
nullify any prior exercise of any such right, remedy or recourse, or (ii)
impair, reduce, release or extinguish the obligations of any party liable under
any of the other Loan Documents as originally provided herein or therein.
7. Compliance With Usury Laws.
(a) No interest rate specified in this Note or any other Loan
Document shall at any time exceed the Maximum Rate. If at any
time the Contract Rate for the Loan or any other indebtedness,
liability or obligation shall exceed the Maximum Rate, thereby
causing the interest accruing thereon to be limited to the
Maximum Rate, then any subsequent reduction in the Contract
Rate therefor shall not reduce the rate of interest therefor
below the Maximum Rate until the aggregate amount of interest
accrued thereon equals the aggregate amount of interest which
would have accrued thereon if the Contract Rate had at all
times been in effect.
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(b) Notwithstanding anything to the contrary contained in this
Note or the other Loan Documents, none of the terms and
provisions of this Note or the other Loan Documents shall ever
be construed to create a contract or obligation to pay
interest at a rate in excess of the Maximum Rate; and
Xxxxxxxxx shall never charge, receive, take, collect, reserve
or apply, as interest on the Loan or any other indebtedness,
liability or obligation, any amount in excess of the Maximum
Rate. The parties hereto agree that any interest, charge, fee,
expense or other obligation provided for in this Note or in
the other Loan Documents which constitutes interest under
applicable law shall be, ipso facto and under any and all
circumstances, limited or reduced to an amount equal to the
lesser of (i) the amount of such interest, charge, fee,
expense or other obligation that would be payable in the
absence of this Section 7 (b) or (ii) an amount, which when
added to all other interest payable under this Note and the
other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, Xxxxxxxxx ever contracts for,
charges, receives, takes, collects, reserves or applies as
interest any amount in excess of the Maximum Rate, such amount
which would be deemed excessive interest shall be deemed a
partial payment or prepayment of principal of the Loan or any
other indebtedness, liability or obligation and treated
hereunder as such; and if the Loan or any other indebtedness,
liability or obligation, or applicable portions thereof, are
paid in full, any remaining excess shall promptly be paid to
the Borrower or other applicable Obligor or Obligors (as
appropriate). In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum
Rate, the Borrower and the other Obligors and Xxxxxxxxx shall,
to the maximum extent permitted by applicable law, (a)
characterize any nonprincipal 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 or unequal parts the
total amount of interest throughout the entire contemplated
term of the Loan or any other indebtedness, liability or
obligation, or applicable portions thereof, so that the
interest rate does not exceed the Maximum Rate at any time
during the term of the Loan or any other indebtedness,
liability or obligation; provided that, if the unpaid
principal balance is paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds
the Maximum Rate, Xxxxxxxxx shall refund to the Borrower or
other applicable Obligor or Obligors (as appropriate) the
amount of such excess and, in such event, Xxxxxxxxx shall not
be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting,
reserving or applying interest in excess of the Maximum Rate.
The terms of this Section shall be deemed to be incorporated
into every other Loan Document.
As used herein the term "Maximum Rate" means, with respect to
Xxxxxxxxx, the maximum non-usurious interest rate, if any,
that any time or from time to time may be contracted for,
taken, reserved, charged or received with respect to the Loan
or other amount as to which such rate is to be determined,
payable to Xxxxxxxxx pursuant to this Note or any other Loan
Document, under laws applicable to Xxxxxxxxx which are
presently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than
applicable laws now allow. The Maximum Rate shall be
calculated in a manner that takes into account any and all
fees, payments and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each
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change in any interest rate provided for herein based upon the
Maximum Rate resulting from a change in the Maximum Rate shall
take effect without notice to the Borrower at the time of such
change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law, the applicable rate ceiling
shall be the weekly rate ceiling described in, and computed in
accordance with the Texas Finance Code or any successor or
replacement statute; provided, however, that, to the extent
permitted by applicable law, Xxxxxxxxx shall have the right to
change the applicable rate ceiling from time to time in
accordance with applicable law.
8. Costs of Collection; Waivers. If this Note is placed in the hands of an
attorney for collection, or is collected in whole or in part by suit or through
probate, bankruptcy or other legal proceedings of any kind, Xxxxxxxx agrees to
pay, in addition to all other sums payable hereunder, all costs and expenses of
collection, including but not limited to reasonable attorneys' fees. Borrower
and any and all endorsers and guarantors of this Note severally waive
presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration and dishonor,
diligence in enforcement and indulgences of every kind and without further
notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral indulgences or partial payments,
either before or after maturity.
9. Governing Law; Venue; Submission to Jurisdiction. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. THIS NOTE
IS PERFORMABLE IN DALLAS COUNTY, TEXAS. XXXXXXXX AGREES THAT DALLAS COUNTY,
TEXAS SHALL BE THE EXCLUSIVE VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM
ARISING UNDER OR RELATING TO THIS NOTE, AND THAT SUCH COUNTY IS A CONVENIENT
FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE OR CLAIM. BORROWER CONSENTS TO THE
PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY,
TEXAS FOR THE LITIGATION OF ANY SUCH DISPUTE OR CLAIM. BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
10. Waiver of Jury Trial. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY OR
ASSOCIATED HEREWITH.
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11. Final Agreement. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN XXXXXXXXX AND BORROWER WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12. Amended and Restated Note. This Note shall constitute an amendment and
restatement of, but shall not constitute or result in an extinguishment of any
indebtedness evidenced by, that certain Convertible Term Note dated June 3,
1999, in the original principal amount of $1,500,000 made by Borrower payable to
the order of Xxxxxxxxx (the "Previous Note"). The indebtedness evidenced by and
outstanding under such prior promissory notes shall be deemed to be indebtedness
evidenced by and outstanding under this Note.
BORROWER:
KARTS INTERNATIONAL INCORPORATED
By:_________________________________________
Name: Xxxxxxx Xxxxxxx
Title: President & C.E.O.
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