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EXHIBIT 10.19
PROMISSORY NOTE
$536,000.00 Dallas, Texas September 6, 2000
FOR VALUE RECEIVED, the undersigned, KESMIL MANUFACTURING, INC., a
Texas corporation (the "Borrower"), hereby promises to pay to the order of
MICHAEL J. BLUMENFELD ("Blumenfeld"; Blumenfeld and any subsequent holder hereof
being hereinafter referred to as "Holder"), without grace at his office at 13950
Senlac Drive, Suite 200, Dallas, Texas 75234, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, the
principal amount of Five Hundred Thirty-Six Thousand and No/100 Dollars
($536,000.00).
1. Payments. Borrower promises to pay accrued interest monthly, on or
before the last day of each month, on the principal amount owing hereunder from
time to time, computed daily, at the rate of twelve percent (12%) per annum,
calculated on the basis of actual days elapsed, with the first such interest
payment to be due and payable on September 30, 2000. The unpaid principal of
this Revolving Promissory Note (this "Promissory Note") shall be due and payable
on the last day of each calendar quarter, beginning November 30, 2000, each in
the amount of $33,500.00, and continuing through and including August 31, 2004
("Maturity"), when all unpaid principal of and accrued unpaid interest on this
Promissory Note and all other charges hereunder shall be due and payable in
full. Should any payment become due and payable on any day other than a business
day for national banks, the date of such payment shall be extended to the next
succeeding business day, and, in the case of a payment of principal or past due
interest or any installment of either thereof, interest shall accrue and be
payable thereon for the period of such extension at the applicable rate or rates
specified herein.
2. Event of Default. In the event of a default in the payment of the
principal of or interest on this Promissory Note, as and when due and payable
after written notice by Holder to Borrower and the expiration of ten (10) days
without payment in full of the amount due; (i) then or at any time thereafter
during the continuance of any such default, the Holder may, with or without
notice to Borrower except as provided above, declare this Promissory Note to be
forthwith due and payable, both as to principal and interest, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration, or other notice of any kind, all of which are hereby expressly
waived, and (ii) thereafter, or after Maturity, all amounts outstanding
hereunder, to the extent permitted by applicable law, shall, at the option of
Holder, bear interest at a per annum rate (the "Default Rate") equal to the
lesser of (i) eighteen percent (18%), or (ii) the Highest Lawful Rate.
3. Attorneys' Fees and Costs. Borrower agrees to pay reasonable
attorneys' fees and costs incurred by the Holder in collecting or attempting to
collect this Promissory Note, whether by suit or otherwise.
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4. Limitations on Interest.
a. It is the intention of Holder and Borrower to conform
strictly to any applicable usury laws. Accordingly, if the transactions
contemplated hereby would be usurious under any applicable law, then,
in that event, notwithstanding anything to the contrary in this
Promissory Note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is
contracted for, taken, reserved, charged or received by Holder under
this Promissory Note shall under no circumstances exceed the Highest
Lawful Rate (hereinafter defined), and any excess shall be canceled
automatically and, if theretofore paid, shall, at the option of Holder,
be credited by Holder on the principal amount of any indebtedness owed
to Holder by Borrower or refunded by Holder to Borrower, and (ii) in
the event that the maturity of this Promissory Note is accelerated or
in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to Holder
may never include more than the Highest Lawful Rate and excess
interest, if any, provided for in this Promissory Note shall be
canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall, at the option of Holder, be
credited by Holder on the principal amount of any indebtedness owed to
Holder by Borrower or refunded by Holder to Borrower.
b. Notwithstanding anything herein to the contrary, in no
event will interest payable to Holder exceed the maximum amount
permitted by the law applicable to Holder (after taking into account
all charges payable to Holder which constitute interest under such
applicable law), but if any amount referred to in this Promissory Note
which would be payable to Holder but for the applicability of usury or
other laws limiting the consideration payable to Holder is not paid to
Holder as a result of the applicability of such laws, then interest on
the outstanding principal balance of this Promissory Note payable to
Holder shall, to the extent permitted by the law, accrue at the maximum
rate of interest permitted by applicable law (after taking into account
all charges payable to Holder which constitute interest under
applicable law) until the total amount received by Holder equals the
amount it would have received had no such laws been applicable.
c. "Highest Lawful Rate" means the maximum non-usurious
interest rate (computed on the basis of a year of 365 or 366 days, as
applicable) that at any time or from time to time may be contracted
for, taken, reserved, charged, or received on amounts due to Holder,
under laws applicable to Holder that are presently in effect or, to the
extent allowed by law, under such applicable laws which allow a higher
maximum non-usurious rate than applicable laws now allow.
5. Applicable Law; Assigns. THIS PROMISSORY NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (EXCEPT THAT
TEX. REV. CIV. STAT. ANN. ART. 5069, CH. 15, WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS, SHALL NOT APPLY TO THIS
PROMISSORY NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY), SUBJECT, HOWEVER, TO
THE EFFECT OF APPLICABLE FEDERAL LAW. UNLESS CHANGED IN ACCORDANCE WITH LAW, THE
APPLICABLE RATE UNDER TEXAS
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LAW SHALL BE THE INDICATED (WEEKLY) RATE CEILING FROM TIME TO TIME IN EFFECT AS
PROVIDED IN TEX. REV. CIV. STAT. ANN. ART. 5069-1.04, AS AMENDED. AS USED
HEREIN, THE TERMS "BORROWER" AND "HOLDER" SHALL BE DEEMED TO INCLUDE THEIR
RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES AND ASSIGNS, WHETHER BY VOLUNTARY
ACTION OF THE PARTIES OR BY OPERATION OF LAW.
7. Prepayment. Borrower may prepay this Promissory Note in full at any
time or in part from time to time, without premium or penalty. All payments made
under this Promissory Note shall be applied first to interest due and any
balance shall be applied in reduction of principal.
IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be duly
executed and delivered as of the date first above written.
KESMIIL MANUFACTURING, INC.
By: /s/ Michael J. Blumenfeld
-------------------------------------
Michael J. Blumenfeld, President
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PROMISSORY NOTE
$45,000.00 Dallas, Texas September 6, 2000
FOR VALUE RECEIVED, the undersigned, KESMIL MANUFACTURING, INC., a
Texas corporation (the "Borrower"), hereby promises to pay to the order of ABE
BLUMENFELD ("Blumenfeld"); Blumenfeld and any subsequent holder hereof being
hereinafter referred to as `Holder"), without grace at his office at 13950
Senlac, Suite 200, Dallas, Texas 75234, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, the
principal amount of Forty-Five Thousand and No/100 Dollars ($45,000.00).
1. Payments. Borrower promises to pay accrued interest monthly, on or
before the last day of each month, on the principal amount owing hereunder from
time to time, computed daily, at the rate of twelve percent (12%) per annum,
calculated on the basis of actual days elapsed, with the first such interest
payment to be due and payable on September 30, 2000. The unpaid principal of
this Revolving Promissory Note (this "Promissory Note") shall be due and payable
on the last day of each calendar quarter, beginning November 30, 2000, each in
the amount of $2,812.50, and continuing through and including August 31, 2004
("Maturity"), when all unpaid principal of and accrued unpaid interest on this
Promissory Note and all other charges hereunder shall be due and payable in
full. Should any payment become due and payable on any day other than a business
day for national banks, the date of such payment shall be extended to the next
succeeding business day, and, in the case of a payment of principal or past due
interest or any installment of either thereof, interest shall accrue and be
payable thereon for the period of such extension at the applicable rate or rates
specified herein.
2. Event of Default. In the event of a default in the payment of the
principal of or interest on this Promissory Note, as and when due and payable
after written notice by Holder to Borrower and the expiration of ten (10) days
without payment in full of the amount due; (i) then or at any time thereafter
during the continuance of any such default, the Holder may, with or without
notice to Borrower except as provided above, declare this Promissory Note to be
forthwith due and payable, both as to principal and interest, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration, or other notice of any kind, all of which are hereby expressly
waived, and (ii) thereafter, or after Maturity, all amounts outstanding
hereunder, to the extent permitted by applicable law, shall, at the option of
Holder, bear interest at a per annum rate (the "Default Rate") equal to the
lesser of (i) eighteen percent (18%), or (ii) the Highest Lawful Rate.
3. Attorneys' Fees and Costs. Borrower agrees to pay reasonable
attorneys' fees and costs incurred by the Holder in collecting or attempting to
collect this Promissory Note, whether by suit or otherwise.
4. Limitations on Interest.
a. It is the intention of Holder and Borrower to conform
strictly to any applicable usury laws. Accordingly, if the transactions
contemplated hereby would be usurious under any applicable law, then,
in that event, notwithstanding anything to the contrary in this
Promissory Note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is
contracted for, taken, reserved, charged or received by Holder under
this Promissory Note shall under no circumstances exceed the Highest
Lawful Rate (hereinafter defined), and any excess shall be canceled
automatically and, if theretofore paid, shall, at the option of Holder,
be
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credited by Holder on the principal amount of any indebtedness owed to
Holder by Borrower or refunded by Holder to Borrower, and (ii) in the
event that the maturity of this Promissory Note is accelerated or in
the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to Holder
may never include more than the Highest Lawful Rate and excess
interest, if any, provided for in this Promissory Note shall be
canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall, at the option of Holder, be
credited by Holder on the principal amount of any indebtedness owed to
Holder by Borrower or refunded by Holder to Borrower.
b. Notwithstanding anything herein to the contrary, in no
event will interest payable to Holder exceed the maximum amount
permitted by the law applicable to Holder (after taking into account
all charges payable to Holder which constitute interest under such
applicable law), but if any amount referred to in this Promissory Note
which would be payable to Holder but for the applicability of usury or
other laws limiting the consideration payable to Holder is not paid to
Holder as a result of the applicability of such laws, then interest on
the outstanding principal balance of this Promissory Note payable to
Holder shall, to the extent permitted by the law, accrue at the maximum
rate of interest permitted by applicable law (after taking into account
all charges payable to Holder which constitute interest under
applicable law) until the total amount received by Holder equals the
amount it would have received had no such laws been applicable.
c. "Highest Lawful Rate" means the maximum non-usurious
interest rate (computed on the basis of a year of 365 or 366 days, as
applicable) that at any time or from time to time may be contracted
for, taken, reserved, charged, or received on amounts due to Holder,
under laws applicable to Holder that are presently in effect or, to the
extent allowed by law, under such applicable laws which allow a higher
maximum non-usurious rate than applicable laws now allow.
5. Applicable Law; Assigns. THIS PROMISSORY NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (EXCEPT THAT
TEX. REV. CIV. STAT. ANN. ART. 5069, CH. 15, WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS, SHALL NOT APPLY TO THIS
PROMISSORY NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY), SUBJECT, HOWEVER, TO
THE EFFECT OF APPLICABLE FEDERAL LAW. UNLESS CHANGED IN ACCORDANCE WITH LAW, THE
APPLICABLE RATE UNDER TEXAS LAW SHALL BE THE INDICATED (WEEKLY) RATE CEILING
FROM TIME TO TIME IN EFFECT AS PROVIDED IN TEX. REV. CIV. STAT. ANN. ART.
5069-1.04, AS AMENDED. AS USED HEREIN, THE TERMS "BORROWER" AND "HOLDER" SHALL
BE DEEMED TO INCLUDE THEIR RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES AND
ASSIGNS, WHETHER BY VOLUNTARY ACTION OF THE PARTIES OR BY OPERATION OF LAW.
6. Prepayment. Borrower may prepay this Promissory Note in full at any
time or in part from time to time, without premium or penalty. All payments made
under this Promissory Note shall be applied first to interest due and any
balance shall be applied in reduction of principal.
IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be duly
executed and delivered as of the date first above written.
KESMIL MANUFACTURING, INC.
By: /s/ Michael J. Blumenfeld
------------------------------------
Michael J. Blumenfeld, President
