THE TERMS OF THIS AGREEMENT AND ANY ACTION TAKEN OR NOT TAKEN UNDER OR IN
CONNECTION THEREWITH SHALL BE SUBJECT IN ALL RESPECTS TO THE TERMS OF THE
INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS OF MAY 23, 2000 BETWEEN IBJ
WHITEHALL BUSINESS CREDIT CORPORATION, AS BANK AGENT, AND FDP BRAKES, INC. (THE
"INTERCREDITOR AGREEMENT"), AND IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS
OF THIS AGREEMENT AND THE TERMS OF THE INTERCREDITOR AGREEMENT, THE TERMS OF THE
INTERCREDITOR AGREEMENT SHALL PREVAIL. NOTWITHSTANDING THE FOREGOING, THE
OBLIGATIONS OF EACH PERSON REQUIRED TO PERFORM HEREUNDER SHALL REMAIN ABSOLUTE
AND COMPLETELY UNAFFECTED BY THE EXISTENCE OF THE INTERCREDITOR AGREEMENT.
AMENDED AND RESTATED SECURED PROMISSORY NOTE
$1,420,000 Tappahannock, Virginia
September 27, 2000
FOR VALUE RECEIVED, U.S. Automotive Manufacturing, Inc., a Delaware
corporation, Quality Automot ive Company, a Delaware corporation, and U.S.
Automotive Friction, Inc., a Delaware corporation (collectively, the
"Borrowers"), hereby jointly and severally promise to pay to FDP Brakes, Inc., a
New Jersey corporation ("Lender"), or to its order, at 0000 X. Xxxxxxxxxxxx
Xxxxxx, Xxxxxxxxxxx, XX 00000, or at such other address as the holder of this
Amended and Restated Secured Promissory Note ("Note") may specify in writing,
the principal sum of One Million Four Hundred Twenty Thousand Dollars
($1,420,000) or, if less, the then unpaid principal amount of Loans (as defined
herein), plus interest, made by the Lender in the manner and upon the terms and
conditions set forth below.
TERMS AND CONDITIONS
1. AMENDMENT AND RESTATEMENT. This Note amends, modifies and restates, but
does not extinguish or novate, that certain Secured Promissory Note dated May
23, 2000 executed by the Borrowers and payable to the order of the Lender in the
original principal amount of $500,000.
2. THE LOANS. Subject to the terms and conditions herein set forth, Lender
hereby agrees to make a $920,000 loan to the Borrowers in addition to the
$500,000 loan previously made to the Borrowers on May 23, 2000 (collectively,
the "Loans") upon the satisfaction of each of the conditions provided in Section
5 hereof.
3. RATE OF INTEREST. The outstanding principal balance of this Note shall bear
interest from the date hereof at a per annum rate equal to ten percent (10%),
subject to Section 8 hereof. Interest charged on this Note shall be computed on
the basis of a three hundred sixty (360) day year for actual days elapsed. In no
event whatsoever shall the amount paid or agreed to be paid to Lender for the
use, forbearance or detention of the principal amount due hereunder exceed the
maximum amount permissible under applicable law. If from any circumstance
whatsoever the fulfillment of any provision hereof involves exceeding the
maximum rate of interest chargeable under applicable law, then, IPSO FACTO, such
obligation shall be reduced to an amount which would be payable upon utilization
of such maximum rate of interest.
4. MATURITY DATE. Principal and all interest under this Note shall be due and
payable in full on October 30, 2002 ("Maturity Date"). This Note may be prepaid
in whole or in part at any time and from time to time without premium or
penalty; provided that any principal amount repaid under this Note may not be
reborrowed. Payment received hereunder shall be applied first to the payment of
interest and then to the payment of principal, unless otherwise agreed by the
Lender.
5. SECURITY. This Note is a secured obligation and is intended to be subject
to the terms of (i) that certain Mortgage, Fixture Filing and Security Agreement
dated as of May 23, 2000, as amended, by and between U.S. Automotive
Manufacturing, Inc. and Lender (the "Florida Mortgage") and (ii) that certain
Deed of Trust, Fixture Filing and Security Agreement dated as of May 23, 2000,
as amended, by and between by Quality Automotive Company for the benefit of
Lender (the "Virginia Deed of Trust" and together with the Florida Mortgage, the
"Mortgages"). Not later than ten (10) days following the date hereof, the
applicable Borrowers shall execute and deliver the amendment to the Virginia
Deed of Trust (the "Virginia Amendment") in substantially the form attached, and
shall provide Lender will policies of title insurance with respect to such
mortgaged properties and such other documents and instruments contemplated by
the Virginia Amendment. All terms, covenants, conditions and agreements
contained in the Mortgages, as amended, are hereby made a part of this Note as
if they were fully set forth herein, and Borrower promises and agrees to keep,
observe and perform the same in accordance with the terms thereof.
6. REPRESENTATIONS OF BORROWERS. In order to induce Lender to make the loan
hereunder, each borrower hereby makes the following representations to Lender.
a. CORPORATE EXISTENCE. Each Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the conduct of its
business requires it to be so qualified.
b. CORPORATE POWER AUTHORIZATION ENFORCEABLE OBLIGATIONS. Each Borrower
has the corporate power, authority and legal right to execute and
deliver this Note, the Mortgages and the Virginia Amendment and to
perform the obligations contemplated hereby and thereby. The
execution, delivery and performance of this Note, the Mortgages and
the Virginia Amendment by each Borrower have been
duly authorized by each Borrower's Board of Directors, and no further
corporate action on the part of any Borrower is necessary to authorize
this Note, the Mortgages and the Virginia Amendment and the
performance of the obligations contemplated hereby and thereby. This
Note, the Mortgages and the Virginia Amendment have been duly executed
and delivered on behalf of each Borrower by duly authorized officers
of such Borrower; and this Note and, if applicable to such Borrower,
the Mortgages and the Virginia Amendment, when executed and delivered,
will constitute the legal, valid and binding obligation of each
Borrower, enforceable against each Borrower in accordance with their
terms.
c. EXECUTION, DELIVERY AND PERFORMANCE. Except as identified on Schedule
6(c) hereto, the execution, delivery and performance of this Note and,
if applicable to such Borrower, the Mortgages and Virginia Amendment
by each Borrower does not and will not violate, conflict with or
result in the breach of any term, condition or provision of, or
require the consent of any other person under (i) any existing law,
ordinance, or governmental rule or regulation to which such Borrower
is subject, (ii) any judgment, order, writ, injunction, decree or
award of any governmental entity which is applicable to such Borrower,
(iii) the charter documents of such Borrower or any securities issued
by such Borrower, or (iv) any mortgage, indenture, agreement,
contract, commitment, lease, plan, authorization, or other instrument,
document or understanding, oral or written, to which such Borrower is
a party, by which such Borrower may have rights or by which any of the
properties or assets of such Borrower may be bound or affected, or
give any party with rights thereunder the right to terminate, modify,
accelerate or otherwise change the existing rights or obligations of
such Borrower thereunder.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute
an "Event of Default" hereunder:
a. failure by Borrower to pay the principal and interest under this Note
on or before the Maturity Date;
b. any representation, warranty or statement made or deemed made by
Borrower in this Note, the Mortgages or the Virginia Amendment shall
prove to be untrue in any material respect on the date as of which
made and the result of which such untrue representation, warranty or
statement shall result in the diminishment in the value of the
property subject to the Mortgages and the Virginia Amendment to an
amount less than the appraised value of such property on the date as
of which such untrue representation, warranty or statement was made;
c. failure of Borrower to perform any of its agreements or covenants
under this Note, the Mortgages or the Virginia Amendment within
forty-five (45) days of the date such agreement or covenant is
required to be performed; PROVIDED, FURTHER, in any
such event, IBJ Whitehall Business Credit Corporation, as agent
(together with any successors and assigns, the "Bank Agent") under
that certain Credit Agreement, dated as of July 30, 1999, as amended
(the "Credit Agreement") shall have the right (but shall be under no
obligation) to cure any such default within the applicable period;
d. failure of Borrower to pay when due any indebtedness for borrowed
money which singularly or in the aggregate exceeds $250,000, and such
failure shall (i) continue beyond any applicable cure period, (ii) not
be waived or (iii) not be enjoined or otherwise stayed by order of a
court of competent jurisdiction, or the Borrower shall suffer to exist
any default or event of default in the performance or observance,
subject to any applicable grace period, of any agreement, term,
condition or covenant with respect to any agreement or document
relating to indebtedness if the effect of such default is to permit,
with the giving of notice or passage of time or both, the holders
thereof, or any trustee or agent for said holders, to terminate or
suspend any commitment (which is equal to or in excess of $250,000) to
lend money or to cause or declare any portion of any borrowings
thereunder to become due and payable prior to the date on which it
would otherwise be due and payable;
e. Borrower is dissolved, terminates its existence, or is liquidated,
makes an assignment for the benefit of creditors, files a petition in
bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies
to any tribunal for any receiver or trustee, commences any proceeding
relating to itself under any bankruptcy, reorganization, readjustment
of debt, dissolution or liquidation law or statute of any
jurisdiction, has commenced against it any such proceeding which
remains undismissed for a period of 60 days, or indicates its consent
to, approval of or acquiescence in any such proceeding, or any
receiver of or trustee for the Borrower or any substantial part of the
property of the Borrower is appointed, or if any such receivership or
trusteeship to continues undischarged for a period of 60 days; or
f. except as provided in the Mortgages or the Virginia Amendment, a
judgment or other claim becomes a lien or encumbrance upon either of
the mortgaged premises or any material portion of Borrower's assets,
which lien or encumbrance (i) is greater than or equal to $250,O00 and
(ii) has not been removed within 30 business days of its attachment.
8. RIGHTS AND REMEDIES. Subject to the provisions of the Intercreditor
Agreement, upon an Event of Default, in addition to any other rights and
remedies available to Lender at law or at equity, Lender may (but shall not be
obligated to), at its sole and absolute discretion and without demand or notice
to Borrower, which notice is hereby expressly waived, do any one or more of the
following:
a. accelerate and declare immediately due and payable all outstanding
principal and interest of this Note, whether or not otherwise due and
payable; or
b. increase the rate of interest such that the amount due and unpaid,
including accrued interest thereon, shall accrue at the per annum
default rate equal to thirteen percent (13%), subject to Section 3 of
this Note.
9. GENERAL PROVISION
a. If this Note is not paid when due, Borrower further promises to pay
all costs of collection, foreclosure fees, and reasonable attorneys'
fees incurred by Lender, whether or not suit is filed hereon.
b. Borrower hereby consents to any and all renewals, replacements, and/or
extensions (none of which Lender is obligated to grant to Borrower) of
time for payment of this Note before, at, or after maturity hereof.
c. Presentment for payment, demand, notice of dishonor, protest, and
notice of protest are hereby expressly waived.
d. Any waiver of any rights under this Note or under any other agreement,
instrument, or paper signed by Borrower is neither valid nor effective
unless made in writing and signed by the holder of this Note.
e. No delay or omission on the part of the holder of this Note in
exercising any right shall operate as a waiver thereof or of any other
right.
f. A waiver by the holder of this Note upon any one occasion shall not be
construed as a bar or waiver of any right or remedy on any future
occasion.
g. Should any one or more of the provisions of this Note be determined
illegal or unenforceable, all other provisions shall nevertheless
remain effective.
h. This Note may not be changed, modified, amended, or terminated orally.
i. This Note shall be governed by, and construed and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania, without
reference to the principles of conflicts of laws thereof.
10. VENUE, JURISDICTION, WAIVER OF TRIAL BY JURY
THE UNDERSIGNED AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS NOTE SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF
BUCKS, COMMONWEALTH OF PENNSYLVANIA OR, AT THE SOLE OPTION OF LENDER, IN ANY
OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. THE
UNDERSIGNED WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 10. THE
UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS NOTE, OR IN ANY WAY CONNECTED
WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH
RESPECT TO THIS NOTE OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE. THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY DO
SO, HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE HOLDER
OF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY Of THIS SECTION 10 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, this Note has been executed and delivered on the date
first set forth above.
U.S. AUTOMOTIVE MANUFACTURING, INC.
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
QUALITY AUTOMOTIVE COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
U.S. AUTOMOTIVE FRICTION, INC.
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
SCHEDULE 6(c)- REQUIRED CONSENTS
