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EXHIBIT 10.8
Chicago, Illinois, January 26, 1998 $250,000
AASCHE TRANSPORTATION SERVICES, INC.
14% SENIOR SUBORDINATED PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE TRUST INDENTURE ACT OF 1939 AND MAY
NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR
APPLICABLE EXEMPTIONS THEREFROM.
FOR VALUE RECEIVED, Aasche Transportation Services, Inc., a Delaware
corporation (the "Company"), promises to pay to Richard S. Baugh, the
registered holder or registered assigns hereof (the "Holder"), the principal
amount of Two Hundred Fifty Thousand Dollars ($250,000) payable on August 1,
1999 (the "Maturity Date"), together with accrued interest on the outstanding
principal amount of this Note (the "Note") at the annual rate calculated on the
basis of the actual number of days elapsed over a year of 360 days, of fourteen
percent (14%) through the Maturity Date, such interest to be payable in full on
the Maturity Date. In the event that any payment of principal and/or interest
hereunder is not paid when due as provided for herein, and without affecting
any of the Holder's other rights and remedies, the unpaid principal balance
hereof shall thereafter accrue interest at the default rate specified in
Section 6 of this Note.
1. Payments and Prepayments.
(a) Payments of principal and/or interest on this Note shall be made at
the principal office of the Company, located at 10214 N. Mt. Vernon Road,
Shannon, Illinois 61078, or such other place or places within the United States
as may be specified by the Holder of this Note in a written notice to the
Company at least ten (10) business days before a given payment date.
(b) Payment of principal and interest on this Note shall be made in lawful
money of the United States of America by mailing the Company's check in the
proper amount to the Holder at least three days prior to the due date of the
payment or otherwise transferring good funds so as to be received by the Holder
on the due date of the payment.
(c) This Note is subject to prepayment, in whole or in part, at the option
of the Company without premium or penalty at any time.
(d) The Company will give the Holder written notice indicating the amount
of any prepayment and the proposed date thereof not less than fifteen (15) days
prior to any such prepayment of this Note.
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2. Obligation Absolute. The obligations under this Note are absolute and
unconditional obligations of the Company and no modification, release, consent,
waiver, rearrangement or amendment shall impair the obligations of the Company
hereunder.
3. Security. The payment of this Note and the Company's obligations
hereunder are not secured by any collateral.
4. Registration, Exchange and Transfer. The Company will keep a register
in which, subject to such reasonable regulations as it may prescribe, it will
register all Notes. No transfer of this Note shall be valid as against the
Company unless made upon the register. This Note is subject to the
restrictions on transfer of this Note and in compliance with said restrictions
on transfer, the Company shall execute and deliver in the name of the
transferee or transferees a new Note or Notes for a like principal amount.
Subject to Section 7, this Note may be exchanged for like notes in the
same aggregate principal amount in other denominations; provided, however, that
none of the Notes shall be in denominations less than $100,000. To be
exchanged, this Note shall be surrendered for that purpose at the principal
office of the Company, and the Company shall execute and deliver in exchange
therefor the Note or Notes which the holder making the exchange shall be
entitled to receive, bearing serial numbers not contemporaneously outstanding.
This Note, if presented for transfer, exchange, redemption or payment,
shall (if so required by the Company) be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the registered Holder or by such Holder's duly authorized attorney.
The Company may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon by anyone
other than the Company), for the purpose of receiving payment of or on account
of the principal hereof and interest hereon, and for all other purposes, and
the Company shall not be affected by any notice to the contrary.
5. Events of Default. In the event that:
(i) the Company defaults in making the payment of principal and all
accrued interest on this Note at the Maturity Date;
(ii) the Company hereafter makes an assignment for the benefit of
creditors, or files a petition in bankruptcy as to itself, is adjudicated
insolvent or bankrupt, petitions any receiver or of any trustee for the
Company or any substantial part of the property of the Company under any
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether or
not hereafter in effect; or if there is hereafter commenced against the
Company any such proceeding and an order approving the petition is
entered or such proceeding remains undismissed for a period of sixty (60)
days, or the Company by any act or omission to act indicates its consent
to or approval of or acquiescence in any such proceeding or the
appointment of any receiver of, or
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trustee for, the Company or any substantial part of its properties, or
suffers any such receivership or trusteeship to continue undischarged for
a period of sixty (60) days; or
(iii) the Company defaults in the due observance or performances, in
any material respect, of any covenant, condition or agreement to be
observed or performed pursuant to the terms of this Note (other than a
default which is specifically provided for in this Section 5) and such
default continues unremedied for more than thirty (30) days after the
Company has received written notice thereof;
Then, and in each and every case, the holder of the Note may declare the
principal and accrued but unpaid interest of the Note to be due and payable
immediately, by written notice to the Company, and upon any such declaration
the same shall become and shall be immediately due and payable.
6. Certain Consequences Upon Default. If and during such time as an Event
of Default has occurred and is continuing, the Company shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (whether before or
after judgment) at the rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the sum of the rate
set forth in the introduction of this Note plus two percent (2%). It is the
intention of the Company and the Holder of this Note to comply with applicable
usury laws (now or hereafter enacted); accordingly, notwithstanding any
provision to the contrary in this Note, and any other document executed in
connection herewith, in no event shall this Note or any such other document
require the payment or permit the collection of interest in excess of the
maximum amount permitted by such laws. If for any circumstances whatsoever,
fulfillment of any provision of this Note or of any such other document at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law for the collection or charging of interest,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit
of such validity, and if for any such circumstances the holder of this Note
shall ever receive anything of value as interest or deemed interest by
applicable law under this Note or any such other document or otherwise an
amount that would exceed the highest lawful rate, such amount that would be
excessive interest shall be applied to the reduction of the principal amount
owing under this Note or on account of any other indebtedness of the Company to
such holder, and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal of such indebtedness, such excess shall
be refunded to the Company. In determining whether or not the interest paid or
payable with respect to any indebtedness of the Company to the Holder, under
any specific contingency, exceeds the highest lawful rate, the Company and such
holder shall, to the maximum extent permitted by applicable law, (i)
characterize any non-principal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
(iii) amortize, prorate, allocate and spread the total amount of interest
throughout the full term of such indebtedness so that the actual rate of such
interest does not exceed the maximum amount permitted by applicable law, and/or
(iv) allocate interest between portions of such indebtedness, to the end that
no such portion shall bear interest at a rate greater than that permitted by
applicable law.
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7. Investment Representations.
(a) The Holder hereby acknowledges that this Note is not being registered
(i) under the Securities Act of 1933, as amended (the "Act") or under the Trust
Indenture Act of 1939 (the "Trust Indenture Act") on the ground that the
issuance of the Note is exempt from registration under Section 4(2) of the Act
as not involving any public offering or (ii) under any applicable state
securities law because the issuance of this Note does not involve any public
offering; and that the Company's reliance on the Section 4(2) exemption of the
Act and under applicable state securities laws is predicated in part on the
representations hereby made to the Company by the Holder that it is acquiring
this Note for investment for its own account, with no present intention of
dividing its participation with others or reselling or otherwise distributing
the same.
(b) The Holder hereby agrees that it will not sell or transfer all or any
part of this Note unless and until it shall first have given written notice to
the Company describing such sale or transfer and furnished to the Company
either (i) an opinion, reasonably satisfactory to counsel for the Company, of
counsel (skilled in securities matters, selected by the Holder and reasonably
satisfactory to the Company) to the effect that the proposed sale or transfer
may be made without registration under either the Act or the Trust Indenture
Act and without registration or qualification under any state law, or (ii) an
interpretive letter from the Securities and Exchange Commission to the effect
that no enforcement action will be recommended if the proposed sale or transfer
is made without registration under the Act or the Trust Indenture Act.
(c) The Company may refuse to recognize a transfer of this Note on its
books should a holder attempt to transfer this Note otherwise than in
compliance with this Section 7.
8. Notices. Any notice required by the provisions of this Note shall be
in writing and shall be delivered by hand, by telecopier, by overnight courier
or mailed by first class, registered or certified mail, postage prepaid, at
such address as may have been furnished to the Company in writing by such
Holder, or, until any such Holder furnishes to the Company an address, then to,
and at the address of, the last Holder of this Warrant who has so furnished an
address to the Company.
9. Miscellaneous.
(a) This Note is the obligation of the Company only, and no recourse shall
be had for the payment thereof or interest thereon against any shareholder,
officer or director of the Company, whether by virtue of any constitution,
statute, rule or law or otherwise, such liability, by the acceptance hereof,
and as part of the consideration hereof, being expressly waived.
(b) Upon receipt of evidence reasonably satisfactory to the Company the
loss, theft, destruction or mutilation of this Note and of a letter of
indemnity reasonably satisfactory to the Company, and upon reimbursement to the
Company of all reasonable expenses incident thereto, and upon surrender or
cancellation of this Note, if mutilated, the Company will make and deliver a
new Note of like tenor in lieu of such lost, stolen, destroyed or mutilated
Note.
(c) THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE COMPANY AND
THE HOLDER HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
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WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
AGREEMENTS AND INSTRUMENTS MADE AND TO BE PERFORMED IN ILLINOIS AND CANNOT BE
MODIFIED OR CHANGED ORALLY.
IN WITNESS WHEREOF, the Company has duly caused this Note to be signed on
its behalf, in its name and by its duly authorized officers as of this 26th day
of January, 1998.
AASCHE TRANSPORTATION SERVICES, INC.
By: /s/Leon M. Monachos
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Leon M. Monachos, Chief Financial Officer
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