THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND
ACCORDINGLY MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR
LAWS OR PURSUANT TO AN EXEMPTION THEREFROM. THE PRINCIPAL AMOUNT OF
THIS NOTE, AND INTEREST IN RESPECT THEREOF, IS SUBORDINATED PURSUANT
TO THE SUBORDINATED AGREEMENTS (AS DEFINED IN THE NOTE).
SUBORDINATED PROMISSORY NOTE
||June 15, 2009 (“Issuance Date”)
VALUE RECEIVED, Carbiz USA Inc., a Delaware corporation (“Maker”), does hereby
covenant and promise to pay to the order of Xxxxxxx X. Xxxxx (“Lender”), with an
address of 000 X. Xxxxx Xxxxx, Xxxx #000, Xxxxxxx Xxxxx, XX 00000, in legal
tender of the United States, One Million Five Hundred Thirteen Thousand Seven
Hundred Sixty-Two and 76/100 Dollars ($1,513,762.76) together with interest
provided in this Note.
Principal shall be paid by Maker to Lender as follows:
Hundred and Fifty Thousand Dollars ($150,000) on the date that is eighteen (18)
months after the Issuance Date;
Hundred Thousand Dollars ($300,000) on the date that is thirty-six (36) months
after the Issuance Date;
Four Hundred Thousand Dollars ($400,000) on the date that is fifty-four (54)
months after the Issuance Date; and
Six Hundred Sixty Three Thousand Seven Hundred Sixty Two and 76/100 Dollars
($663,762.76) on the date that is seventy-two (72) months after the Issuance
Interest. Simple interest at a rate of eight percent (8%) per annum
on the principal amount outstanding under this Note shall be paid monthly by
Maker to Lender beginning on October 31, 2009 (which first interest payment
shall only be in the amount of $7,830.50) and continuing each month thereafter
on the last day of the month for the month then ended until the principal due
hereunder is paid. Interest shall accrue and be calculated on the basis of one
three hundred sixty-fifth (1/365th) of the applicable rate for each calendar day
such balance of principal remains unpaid.
Prepayment. Maker may prepay this Note in whole or in part without
paying any prepayment fee.
Set-Off. Maker may, at its option, set off against any principal
or interest under this Note any claim it may have under Sections 8.5 or 9.4 of
the Asset Purchase Agreement dated June 15, 2009, by and between the Maker and
Star Financial Services, a California corporation
Documentary Stamp Taxes. Maker shall pay the cost of any
documentary tax, or other stamps now or hereafter required by any applicable
law, at any time, to be affixed to this Note.
Loan Charges. Nothing herein contained, nor any transaction
related thereto, shall be construed or so operate as to require Maker or any
person liable for the repayment of same, to pay interest in an amount or at a
rate greater than the maximum allowed by applicable law. Should any interest or
other charges paid by Maker, or any parties liable for the payment of the loan
made pursuant to this Note, result in the computation or earning of interest in
excess of the maximum legal rate of interest permitted under the law in effect
while said interest is being earned, then any and all of that excess shall be
and is waived by Lender, and all that excess shall be automatically credited
against and in reduction of the principal balance, and any portion of the excess
that exceeds the principal balance shall be paid by Lender to Maker or any
parties liable for the payment of the loan made pursuant to this Note so that
under no circumstances shall the Maker, or any parties liable for the payment of
the loan hereunder, be required to pay interest in excess of the maximum rate
allowed by applicable law.
Governing Law. This Note and the obligations arising
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware and any applicable law of the United States of America.
Subordination. The principal of, and interest on, the
Note is hereby subordinated and subject in right of payment, to the extent and
in the manner set forth in (a) the Subordination Agreement dated June 15, 2009
made for the benefit of Xxxxx Fargo Preferred Capital, Inc., (b) the
Subordination Agreement dated June 15, 2009 made for the benefit of Dealer
Services Corporation, and (c) the Subordination Agreement dated June 15, 2009
made for the benefit of Trafalgar Specialized Investment Fund, Luxembourg
(together, the “Subordination Agreements”), to the prior payment in full of all
of the Obligations (as defined in each of the foregoing Subordination
Each payment shall be applied first to the payment of interest on unpaid
principal, and second, to the payment of principal.
Maker may not assign this Note without the prior written consent of Lender.
term “Maker” as used herein, in every instance shall include the Maker’s
successors and assigns, and shall denote the singular and/or plural, the
masculine and/or feminine, and natural and/or artificial persons whenever and
wherever the context so requires or admits.
WITNESS WHEREOF, Maker has duly executed this Note as of June 15, 2009.
||Carbiz USA Inc.
||/S/Xxxx X. Xxx
||Xxxx X. Xxx, President
THIS NOTE HAS BEEN EXECUTED AND DELIVERED OUTSIDE THE STATE
FLORIDA AND NO FLORIDA DOCUMENTARY STAMP TAXES ARE DUE.