EXHIBIT 10.29.2
SECURED PROMISSORY NOTE
$__________ September __, 2001
FOR VALUE RECEIVED, this Secured Promissory Note (this "Note") is made
by Probex Corp., a Delaware corporation ("Maker"), to
_____________________________("Payee"). This Note is one of the "Notes" as
defined in, and is entitled to the benefits of, that certain Loan Agreement
("Loan Agreement") and Intercreditor and Security Agreement (the "Security
Agreement"), each dated of even date herewith.
1. Payments. Maker hereby promises to pay to the order of Payee the
principal sum of ___________________________ Dollars ($______________) at
______________________, or such other place as Payee may designate from time to
time in writing, in lawful money of the United States of America and in
immediately available funds, together with interest on the unpaid principal
balance hereof at the rate provided herein from the date of this Note until
payment in full of the indebtedness evidenced by this Note or conversion of this
Note as provided for in Section 3 hereof. This Note and all accrued and unpaid
interest shall be due and payable in one lump sum on September 30, 2001 (the
"Maturity Date"), which shall be subject to automatic extensions as provided
below. Any payment made under this Note shall be applied first to interest
accrued and unpaid on the outstanding principal balance as of such date of
payment and then to the outstanding principal balance due hereunder. If any
required payment in cash or Maker's common stock falls due on a Saturday, Sunday
or a national or state bank holiday in Texas, then such date shall be extended
to the next succeeding day that is not a Saturday, Sunday or national or state
bank holiday.
2. Interest Rate. The principal amount outstanding from time to time
hereunder shall bear interest calculated on the basis of a 365-day year, at a
rate equal to twelve percent (12%) per annum or, after an Event of Default
hereunder, eighteen percent (18%) per annum.
3. Conversion. The outstanding principal balance and all accrued and
unpaid interest due under this Note at the closing on or before the Final
Extension Date (as defined below) of the sale by Maker of its preferred or
common stock on customary terms for cash to be used to finance Maker's proposed
Wellsville, Ohio facility, which results in proceeds to the Maker aggregating at
least $35 million, excluding the outstanding principal balance and interest due
under this Note on the date thereof, following or simultaneously with the
closing of a debt financing on customary terms under which Maker has drawn or is
currently able to draw not less than $80 million for the financing of such
Wellsville, Ohio facility (the "Qualified Equity Financing"), shall
automatically be converted into fully-paid and non-assessable shares of Maker's
preferred or common stock identical in all respects as to those shares issued to
the purchasers in the Qualified Equity Financing. The number of shares issued to
Payee upon conversion of this Note shall be equal to the outstanding principal
balance and all accrued and unpaid interest due under this Note on the date of
the consummation of the Qualified Equity Financing divided by the purchase price
paid to Maker by such purchasers for each share of Maker's stock in the
Qualified Equity Financing.
4. Extension. The Maturity Date is subject to extension as follows:
(i) If the Qualified Equity Financing is not consummated
on or prior to the Maturity Date, the Maturity Date
shall be extended to October 31, 2001 (the "First
Extension Date"), and, for no additional cash
consideration, the Maker shall issue to Payee on or
prior to September 30, 2001, that number of shares of
Maker's common stock having an aggregate value
(calculated as provided below) equal to twenty-five
percent (25%) of the outstanding principal balance
and all accrued and unpaid interest due under this
Note on the Maturity Date, which issuance shall be a
condition to such extension;
(ii) If the Qualified Equity Financing is not consummated
on or prior to the First Extension Date, the First
Extension Date shall be extended to November 30, 2001
(the "Second Extension Date"), and, for no additional
cash consideration, the Maker shall issue to Payee on
or prior to October 31, 2001, that number of shares
of Maker's common stock having an aggregate value
(calculated as provided below) equal to ten percent
(10%) of the outstanding principal balance and all
accrued and unpaid interest due under this Note on
the First Extension Date, which issuance shall be a
condition to such extension; and
(iii) If the Qualified Equity Financing is not consummated
on or prior to the Second Extension Date, the Second
Extension Date shall be extended to December 31, 2001
(the "Final Extension Date"), and, for no additional
cash consideration, the Maker shall issue to Payee on
or prior to November 30, 2001, that number of shares
of Maker's common stock having an aggregate value
(calculated as provided below)equal to ten percent
(10%) of the outstanding principal balance and all
accrued and unpaid interest due under this Note on
the Second Extension Date, which issuance shall be a
condition to such extension.
The shares of Maker's common stock issued in accordance with this Section 4
shall be deemed issued at a value per share equal to the lower of (x) the
average of the closing share prices of Maker's common stock as reported by the
American Stock Exchange on the ten (10) trading days that are three (3) days
prior to the relevant Extension Date; (y) if the Qualified Equity Financing is a
sale of Maker's preferred stock, the initial conversion price at which the
shares issued in the Qualified Equity Financing are convertible into the Maker's
common stock, if applicable; or (z) if the Qualified Equity Financing is sale of
Maker's common stock, the purchase price of such stock paid to Maker by such
purchasers. At the time of each extension, shares shall be issued based on the
price computed in accordance with clause (x) above. Certificates representing
the shares of the Maker's common stock that the Payee is entitled to in
accordance with the foregoing in excess of the number of shares issued at the
time of each extension, if any, shall be issued to the Payee upon the
consummation of the Qualified Equity Financing; provided, that the absence of
stock certificates evidencing the shares of Maker's common stock shall in no way
limit or effect the Payee's right and title to such shares of Maker's common
stock.
5. Use of Proceeds. Maker and its subsidiaries shall utilize the
proceeds from this Note for general working capital purposes in a manner
consistent with the projections dated as of July 21, 2001, previously provided
to Payee. Maker agrees to implement, or continue its application of, reasonable
cash flow conversation measures that it believes are in its best interest to
maximize the useful life of the proceeds received by the Maker hereunder.
6. Event of Default. An event of default ("Event of Default") shall
exist if:
(a) Maker shall fail to pay any principal of, or any interest
on, this Note or any other amount payable under this Note, when and as the same
shall become due and payable;
(b) any representation or warranty made or deemed made by or
on behalf of Maker in the Security Agreement, or any amendment or modification
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thereof or waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection the Security Agreement,
or any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect when made or deemed made;
(c) Maker or any of its subsidiaries shall fail to observe or
perform any covenant, condition or agreement contained in the Security Agreement
or this Note;
(d) Maker or any of its subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any indebtedness, individually or in the aggregate, in excess of $100,000
("Material Indebtedness"), when and as the same shall become due and payable;
(e) any event or condition occurs that results in any Material
Indebtedness of Maker or any of its subsidiaries becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any indebtedness for
borrowed money of Maker or any of its subsidiaries, or any trustee or agent on
its or their behalf, to cause any indebtedness for borrowed money of Maker or
any of its subsidiaries to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
(f) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of Maker or any of its subsidiaries or their respective
debts, or of a substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Maker or any of its subsidiaries or for a
substantial part of any of their assets, and, in any such case, such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(g) Maker or any of its subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (f) of this Section, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Maker or any of its subsidiaries or for a
substantial part of any of their assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(h) Maker or any of its subsidiaries shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $25,000 shall be rendered against Maker or any of
its subsidiaries and the same shall remain undischarged for a period of thirty
(30) days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets
of Maker or any of its subsidiaries to enforce any such judgment;
(j) any lien purported to be created under the Security
Agreement shall cease to be, or shall be asserted by Maker or any affiliate
thereof not to be, a valid and perfected lien on the Collateral (as defined in
the Security Agreement), with the priority required by the Security Agreement,
except (i) as a result of the sale or other disposition of the Collateral in a
transaction permitted under the Security Agreement or (ii) as a result of the
Collateral Agent's failure to maintain possession of any promissory notes or
other instruments delivered to it under the applicable Security Agreement;
(k) there shall occur, in the reasonable judgment of Payee, a
material adverse change in the business, assets or prospects of Maker or any of
its subsidiaries after the date hereof;
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(l) there shall occur any material loss, theft, damage or
destruction of any of Maker's or any of its subsidiaries' property or assets not
fully covered by insurance;
(m) there shall occur a cessation of a substantial part of
the business of Maker or any of its subsidiaries for a period which
significantly effects its capacity to continue its business on a profitable
basis; or Maker or any of its subsidiaries shall suffer the loss or revocation
of any license or permit now held or hereafter acquired by it which is necessary
to the continued or lawful operation of its respective business; or Maker or any
of its subsidiaries shall be enjoined, restrained or in any way prevented by
court, governmental or administration order from conducting all or any material
part of its respective business affairs; or any material part of Maker's or any
of its subsidiaries' property shall be taken through condemnation or the value
of such property shall be materially impaired through condemnation;
(n) Maker's common stock shall cease to be listed on any
national securities exchange or reported by the NASDAQ National Market System or
Small Cap Market System; or
(o) Maker shall receive a "going concern" opinion from its
independent auditors, or, after giving effect to proceeds of this Note,
otherwise does not have sufficient available working capital to ensure
viability.
7. Remedies Upon an Event of Default.
(a) Acceleration.
(i) If an Event of Default described in paragraph (f)
or (g) of Section 6 hereof shall occur, this Note and the obligation to pay the
principal and accrued interest hereunder shall automatically become immediately
due and payable without any action or notice on the part of the Payee.
(ii) If an Event of Default described in paragraphs
(a), (b), (d), (e), (h), (i), (j), (k), (l) or (m) of Section 6 hereof has
occurred, and at any time thereafter during the continuance of such event, the
Payee may declare the then outstanding amounts hereunder to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable) and thereupon the
principal of the amounts hereunder so declared to be due and payable, together
with accrued interest thereon and all other obligations of Maker accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
Maker;
(iii) If any other Event of Default described in
Section 6 has occurred, Payee shall deliver notice of such event to Maker and
thereupon Maker shall have twenty (20) calendar days to cure such Event of
Default, or Events of Default ("Cure Period"). If Maker does not cure the Event
of Default, or Events of Default, during the Cure Period, then at any time
thereafter during the continuance of such event, the Payee may declare the then
outstanding amounts hereunder to be due and payable in whole (or in part, in
which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable) and thereupon the principal amounts hereunder so
declared to be due and payable, together with accrued interest thereon and all
other obligations of Maker accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Maker.
(b) Remedies Cumulative. The remedies available to Payee, as
provided herein, shall be cumulative and concurrent, and may be pursued
singularly, successively or together, at the sole discretion of Payee, and may
be exercised as often as occasion therefor shall arise. No act of omission or
commission of Payee, including specifically any failure to exercise any right,
remedy or recourse, shall be deemed to be a waiver or release of the same, such
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waiver or release to be effected only through a written document executed by
Payee and then only to the extent specifically recited therein. A waiver or
release with reference to any one event shall not be construed as continuing, as
a bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.
8. Notices. Except as otherwise provided for herein, any notice or
demand which, by the provisions hereof, is required or which may be given to or
served upon Maker or Payee shall be in writing and, if by telecopy, shall be
deemed to have been validly served, given or delivered when transmitted with a
copy immediately mailed by registered or certified mail, if by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery and, if mailed, shall be deemed to have been validly served,
given or delivered three (3) business days after deposit in the United States
mails, as registered or certified mail, with proper postage prepaid and
addressed to the party to be notified, as set forth in the Security Agreement or
to Payee to such other address as Payee shall hereafter give in writing to Maker
by similar notice.
9. Successors and Assigns. This Note shall be binding upon Maker and
its successors and assigns (including, without limitation, a receiver, trustee
or debtor-in-possession of or for Maker) and shall inure to the benefit of Payee
and its successors and assigns. Maker may not assign its rights hereunder
without the prior written consent of Payee, in its sole discretion, other than
by operation of law. Payee may assign all or a part of its interest in this Note
or its rights hereunder to any party without the prior written consent of Maker.
10. GOVERNING LAW. THIS NOTE SHALL BE DEEMED A CONTRACT AND INSTRUMENT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND ACCEPTED BY PAYEE IN SAID
STATE, AND ANY AND ALL CLAIMS, DEMANDS OR ACTIONS IN ANY WAY RELATING THERETO OR
INVOLVING ANY DISPUTE BETWEEN ANY OF THE PARTIES TO THIS NOTE, WHETHER ARISING
IN CONTRACT OR TORT, AT LAW, IN EQUITY OR STATUTORILY, SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND/OR GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
(EXCEPTING ITS CHOICE OF LAW RULES, OTHER THAN SECTION 5-1401 OF NEW YORK'S
GENERAL OBLIGATION LAW) AND THE LAWS OF THE UNITED STATES OF AMERICA.
11. Severability. If any provisions of this Note or any payments
pursuant to the terms hereof shall be invalid or unenforceable to any extent,
the remainder of this Note and any other payments hereunder shall not be
affected thereby and shall be enforceable to the greatest extent permitted by
law. Furthermore, in lieu of such invalid or unenforceable provisions, there
shall be added automatically as part of this Note, a provision or provisions as
similar in its or their terms to such invalid or unenforceable provisions as may
be possible and be legal, valid and enforceable.
12. No Oral Agreements. This Note and the Security Agreement as written
represent the final agreement between Maker and Payee with respect to the
matters contained herein and therein and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements between Maker and Payee.
There are no unwritten agreements between Maker and Payee.
13. Prepayments. This Note may not be prepaid in whole or in part
without the consent of the holder hereof and then only if all the Notes are
simultaneously prepaid pro rata.
XXXXXXX [14. Other Agreements. This Note shall not constitute a waiver of the
Payee's rights, Maker's obligations or the conditions, if any, contained in that
certain Note Purchase Agreement, Intercreditor and Collateral Agency Agreement,
Security Agreement, Pledge Agreement, Guaranty Agreement and Escrow Agreement,
all of which are dated as of November 29, 2000.]
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UIC [14 Other Agreements. This Note shall not constitute a waiver of the Payee's
rights, Maker's obligations or the conditions contained in that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") dated as February 2, 2001,
by and between Maker and the Payee with respect to the Third Tranche Investment
(as defined therein) and that certain Additional Right to Purchase Agreement
dated as of February 2, 2001, by and between Maker and the Payee. The principal
amount of this Note, together with accrued interest, shall offset the amount of
the investment required by the Payee in Maker under the Stock Purchase
Agreement, irrespective of the repayment in full of this Note by Maker. For
purposes of clarity, irrespective of conversion pursuant to Section 3 of this
Note or payment pursuant to Section 1 of this Note, the amount of investment
required by the Payee under the Stock Purchase Agreement is hereby decreased by
the principal amount of this Note, together with accrued interest. In addition,
the parties hereto hereby agree and acknowledge that any participation by the
Payee in the Qualified Equity Financing shall also offset the amount of the
investment required by the Payee in Maker under the Stock Purchase Agreement,
irrespective of the type of security being issued.]
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IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the date and year first above written.
MAKER:
PROBEX CORP.,
a Delaware corporation
By:_________________________________
Name: ______________________________
Title: _____________________________
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