Exhibit 10.35.2
PROMISSORY NOTE
$7,400,000 Denver, Colorado
September 30, 1997
FOR VALUE RECEIVED the undersigned ("Maker") promises to pay to the order
of R. Douglas Spedding (the "Lender"), or order, on October 31, 1998 (the
"Maturity Date"), the principal sum of $7,400,000, or so much of that sum as
may be advanced under that certain Interim Construction Master Loan Agreement
(as it may be amended, modified, extended and renewed from time to time, the
"Loan Agreement") dated as of September 30, 1997 between Maker and Lender,
together with interest on the unpaid principal per annum at the prime rate
quoted from time to time by Bank of America, as published in the daily
Western Edition of the Wall Street Journal, plus 1% additional interest (ie.
Bank of America prime rate + 1%) (the "Loan"). Interest shall accrue as of
the last day of each month, compounding monthly, and shall be due and payable
to Lender no later than the tenth (10th) day of the following month and on
the Maturity Date of this Note, and shall be calculated on the basis of a
365-day year and the actual number of days elapsed. If interest is so paid
in a timely manner, no compounding of interest will take place. Maker shall
pay all interest and principal due upon this Note directly to R. Douglas
Spedding, c/o RDS, Inc., 4380 East Alameda Avenue, Glendale, Colorado 80222,
or such other place as Lender may designate to Maker in writing during the
term of this Note.
This Note is issued to evidence the loan of $7,400,000 in principal amount
made by the Lender to the Maker, and such loan shall be governed specifically
by the terms of this Note, as amended in writings executed by Maker and
Lender from time to time (the "Note"). This Note is given as partial
consideration by Maker to Lender in connection with that Interim Construction
and Master Loan Agreement (the "Loan Agreement") entered into by and between
Lender and Maker dated September 30, 1997, and any and all amendments,
supplements, and documents given in connection therewith, including a
security agreement, second deeds of trust and financing statements to secure
a perfected security interest in and to the real property located in Denver,
Colorado and Las Vegas, Nevada upon which the new automobile dealerships are
being constructed, and by all of the improvements being placed thereon
(hereafter the "Purchase Documents").
The principal amount of this Note is payable in accordance with the terms of
this Note and in full on or before the Maturity Date. Maker shall pay
interest monthly as set forth herein, with the full amount of all
principal and interest remaining due hereunder to be paid by Maker to Lender
on or before the Maturity Date. There shall be no penalty hereunder for
Maker prepaying any portion or all of the principal and interest due
hereunder.
At the discretion of Lender, overdue principal and (to the extent permitted
under applicable law) interest and all amounts due to the Lender under the
terms of this Note not paid when the same is due, whether caused by
acceleration of maturity or otherwise, shall bear interest at the rate of
eighteen percent (18%) per annum. In the event that any monthly installment
of interest shall not be received by the tenth (10th) day after it is due,
Maker shall pay an amount equal to 10% of the amount of such past due
installment as a late charge for the loss of the use of the funds and for the
expense of handling the delinquent payment.
The amount evidenced by this Note shall include all amounts loaned by Lender
to Maker for the construction of new automobile dealership facilities in
Denver, Colorado and Las Vegas, Nevada as provided for in the Loan Agreement
described above.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest permitted to be charged to Maker under applicable
law, but if, notwithstanding, interest in excess of such maximum rate shall
be paid hereunder, the excess shall be retained by the Lender and applied
against and to reduce the outstanding principal balance of the Note, unless
such retention is not permitted by law, in which case the interest rate on
this Note shall be adjusted to the maximum permitted under applicable law
during the period or periods that the interest rate otherwise provided herein
would exceed such rate.
All payments of interest and principal due Lender under this Note shall be
made in lawful money of the United States of America to R. Douglas Spedding,
c/o RDS, Inc., at 4380 East Alameda Avenue, Glendale, Colorado 80222, or such
other place as Lender may designate to Maker in writing during the term of
this Note, and shall be sent via first class United States mail, postage
prepaid.
This Note is secured by the real property and improvements being built by
Maker in Las Vegas, Nevada and Denver, Colorado as described herein and in
the Loan Agreement, and such security interests are evidenced
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by the Purchase Documents.
Time is of the essence hereof. Upon the occurrence of any event of default
under this Note, then the whole principal sum plus accrued interest shall, at
the option of the Lender, become immediately due and payable without notice
or demand, and the Lender, shall have and may exercise any or all of the
rights and remedies provided herein, as they may be amended, modified or
supplemented from time to time.
The following shall be deemed to be events of default by Maker under this
Note: (1) Maker shall fail to pay when due any installment of interest or
principal or any other payment required pursuant to this Note, and such
failure is not cured within ten (10) days after written notice to Maker, or
(2) Maker shall fail to comply with any other term, provision or covenant of
this Note or of the Purchase Documents, and the failure is not cured within
twenty (20) days after written notice to Maker, Maker hereby acknowledging
that all defaults under this Note are material; or (3) Maker shall file a
petition or be adjudged bankrupt or insolvent under any applicable federal or
state bankruptcy or insolvency law or admit that it cannot meet its financial
obligations as they become due; or a receiver or trustee shall be appointed
for all or substantially all of the assets of Maker; or Maker shall make a
transfer in fraud of creditors or shall make an assignment for the benefit of
creditors.
If Maker fails to pay any amount due under this Note or is otherwise in
default hereunder and Lender takes any action to collect the amount due or to
exercise its rights under the Note, including without limitation retaining
attorneys for collection of this Note, or if any suit or proceeding is
brought for the recovery of all or any part of or for protection of the
indebtedness or to enforce the Lender' rights under the Note, then Maker
agrees to pay on demand all reasonable attorneys' fees, costs and expenses of
any such action, suit or proceeding, and any appeal of any such action, suit
or proceeding, incurred by Lender in undertaking such action against Maker.
Maker and any endorser hereof waive presentment for payment, protest, notice
of dishonor and protest, and consent to any extension of time with respect to
any payment due under this Note, to any substitution or release of collateral
now or hereafter taken pursuant to the Note, and to the addition or release
of any party.
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No waiver of any payment under this Note shall operate as a waiver of any
other payment.
No delay or failure of the holder of this Note in the exercise of any right
or remedy provided for hereunder shall be deemed a waiver of such right by
the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy which the holder may have.
This Note and every covenant, agreement and other provision hereof shall be
binding upon Maker, and shall inure to the benefit of Lender. Maker shall
have no right to assign, convey, bargain, sell or otherwise transfer to any
other person or entity any of Maker's rights, privileges, powers, options,
benefits, duties or obligations under this Note without the prior written
consent of Lender, which consent may be granted or denied at the sole and
absolute discretion of Lender. For purposes of this Agreement, any change in
control of a fifty percent (50%) or more ownership stake in Maker's common
stock equity or assets shall constitute an assignment requiring the prior
written consent of Lender.
In the event of any default or breach by Maker under the terms of this Note:
(i) if the amount of any proceeds collected by Lender in any foreclosure or
similar action is not sufficient to pay all amounts then due and owing under
the Note, all of such proceeds shall be paid to Lender, and Lender may assert
a legal claim against Maker for any difference still owed to Lender; and (ii)
if the amount of any proceeds collected by Lender in any foreclosure or
similar action exceeds the amount sufficient to pay all amounts then due and
owing under the Note, an amount of the proceeds sufficient to pay all amounts
then due and owing under the Note shall be paid to Lender and the excess or
remainder of the proceeds distributed and paid by Lender to Maker.
Any notice required to be given under this Note shall be in writing and shall
be hand delivered, sent by overnight courier or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Maker:
Cross-Continent Auto Retailers, Inc.
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1201 S. Taylor
P.O. Box 750
Amarillo, Texas 79101-4313
Attn: Robert W. Hall
R. Wayne Moore
Lender:
R. Douglas Spedding
c/o RDS, Inc.
4380 E. Alameda Avenue
Glendale, Colorado 80222
With a copy to :
Burg & Eldredge, P.C.
40 Inverness Drive East
Englewood, Colorado 80112
Attn: Michael S. Burg
Any notice shall be deemed effective upon receipt by a party. For purposes
of this Note, receipt of notice shall be deemed effective (i) at the time the
written notice is hand delivered, (ii) one day after written notice is given
to an overnight courier (as evidenced by receipt from the overnight courier)
for next-day delivery to the other party, or (iii) seven (7) days after the
same is deposited with the U.S. Postal Service. Either Maker or Lender may
change its address for the giving of notice hereunder by providing written
notice to the other parties hereunder.
At the option of Lender, an action may be brought to enforce this Note in the
District Court in and for the County of Adams, State of Colorado, in the
United States District Court for the District of Colorado, or in any other
court in which venue and jurisdiction are proper. Maker and all signers or
endorsers hereof consent to venue and jurisdiction in the District Court in
and for the County of Adams, State of Colorado and in the United States
District Court for the District of Colorado and to service of process under
Sections 13-1-124(1)(a) and 13-1-125, Colorado Revised Statutes (1973), as
amended, in any action commenced to enforce this Note.
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This Note is to be governed by and construed according to the laws of the
State of Colorado.
DATED as of the day and year first set forth above.
"MAKER"
CROSS-CONTINENT AUTO RETAILERS, INC., a Delaware corporation
By /s/ Robert W. Hall
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Title Senior Vice Chairman
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RECEIPT
Lender hereby states that on or about September ____, 1997, Lender received
and agreed to the terms of the original Promissory Note, dated September
____, 1997, payable to Lender under that $7,400,000 loan made by R. Douglas
Spedding, Lender to Cross-Continent Auto Retailers, Inc., Maker.
By:
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R. Douglas Spedding
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