Exhibit 10.10
ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED IN
RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL INDEBTEDNESS OWNED TO
FINOVA CAPITAL CORPORATION AS SET FORTH IN THAT CERTAIN SUBORDINATION AND
STANDSTILL AGREEMENT AMONG FINOVA CAPITAL CORPORAT1ON, THE PAYEE OF THIS
NOTE AND THE OTHER PARTIES NAMED THEREIN.
PROMISSORY NOTE
Bensenville, Illinois
$773,479 March 15, 1999
1. Payment. FOR VALUE RECEIVED, PC Dynamics of Texas, Inc., a Texas
corporation ("BUYER"), hereby promises to pay to the order of PC Dynamics
Corporation, a Texas corporation ("PC Dynamics"), the principal sum of
Seven hundred and seventy three thousand four hundred and seventy-nine
Dollars ($773,479) in nine equal monthly principal installments of
$85,942, payable on the first day of each month, commencing with July 1,
1999. Nor withstanding the foregoing sentence, (i) in the event that
BUYER purchases the Facility (as defined in the Agreement) in accordance
with the provisions of the Lease (as defined in the Agreement (as defined
below)) on or before June 25, 1999, the unpaid principal amount
outstanding shall be payable in equal monthly principal installments of
$75,000, payable on the first day of each month, commencing with the
first month following the month of the closing of the purchase of the
Facility, until all obligations hereunder have been paid in full; and
(ii) in the event that BUYER purchases the Facility in accordance with
the provisions of the Lease after June 25, 1999 but prior to the
September 25, 1999, the unpaid principal amount outstanding shall be
payable in equal monthly principal installments of $100,000, payable on
the first day of each month, commencing with the first month following
the closing of the purchase of the Facility, until all obligations
hereunder have been paid in full. BUYER hereby further promises to pay
interest (computed on the basis of a 360-day year of twelve 30-day
months) at the Prime Rate (as defined below) plus 1% per annum on the
principal amount from time to time outstanding from the date hereof, such
interest to be payable on each date specified above for principal
payments and until this Note and all obligations hereunder have been paid
in full. Notwithstanding the foregoing, BUYER promises to pay interest
on any overdue principal and (to the extent legally enforceable) on any
overdue installment of interest at a rate per annum equal cc the greater
of: (i) the Prime Rate from time to time in effect plus 5% and (ii) 15%.
Both principal and interest hereunder are payable in lawful money of the
United States of America and in next-day funds to PC Dynamics at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
For purposes of this Note, (i) "Prime Rate" shall mean for each
calendar month commencing with March, 1999, the rate of interest
established, announced or published by ▇▇▇▇▇▇ Trust and Savings Bank on
the last Business Day preceding the first day of such calendar month, as
their prime rate, reference rate or comparable or equivalent rate for
loans made in Chicago, Illinois; and (ii) "Business Day" shall mean any
day other than a Saturday or Sunday on which banks are generally open for
business in Chicago, Illinois.
2. Other Documents. This Promissory Note (the "Note") is the Note
referred to in Section 3.2(b) of that certain Agreement dated as of March
15, 1999 (the "Agreement") between BUYER and PC Dynamics. Unless otherwise
defined herein, the capitalized terms used herein which are defined in the
Agreement shall have the meanings specified in the Agreement. This Note is
guaranteed pursuant to the terms of that certain (i) Guarantee dated as of
March 15, 1999 executed by Mr. D. ▇▇▇▇▇▇ ▇▇▇▇▇ in favor of PC DYNAMICS and
(ii) Guarantee dated March 15, 1999 executed by Performance Interconnect
Corp. ("PIC") in favor of PC DYNAMICS.
3. Optional Prepayment. BUYER may repay all or any portion of this Note
that is $1,000 or an integral multiple thereof at any time or times, without
premium or penalty. BUYER shall give PC Dynamics not less than five (5)
Business Days' prior written notice of any intended prepayment. Any
prepayment shall first be credited against accrued but unpaid interest
hereunder to the date of the prepayment and the balance, if any, shall be
credited against the then-outstanding principal amount hereof.
4. Business and Financial Covenants. With respect to its financial and
business affairs, BUYER covenants with PC Dynamics as follows:
(a) Inspection Rights. PC Dynamics or its authorized representatives
may visit, at their expense, any of BUYER's properties, inspect and examine
its records and books of accounts, take abstracts or copies thereof, and
discuss its affairs, finances and books of accounts with its officers, at
reasonable times and in a reasonable manner.
(b) Maintenance of Properties: Compliance. BUYER shall keep the
Assets in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all necessary and proper repairs,
renewals, replacements, additions and improvements thereto, and BUYER will
at all times comply with the material provisions of all legal requirements
and leases to which it is a party or under which it occupies property so as
to prevent any loss or forfeiture thereof or thereunder.
(c) Maintenance of Corporate Existence and Conduct of Business. BUYER
shall preserve its corporate existence, rights and franchises; BUYER will
carry on and conduct its business in substantially the same manner as it is
presently conducted by PC Dynamics, shall not use its properties for any
unlawful purpose, shall not permit its properties or any part thereof to be
levied upon under execution, attachment or restraint unless any action is
contested by BUYER and protected by appropriate bond or other surety and
shall not waste or destroy any of its properties or any part thereof.
(d) Expenses. BUYER agrees to pay PC Dynamics all reasonable costs
and expenses (including, but not limited to, reasonable attorneys' fees and
court costs) incurred by it in the collection of this Note or in the
enforcement of any provision of this Note.
(e) Limitations on Disposition. BUYER will not sell, exchange,
transfer or otherwise dispose of any of the Assets, or attempt or contract
to do so, except for sale of inventory in the ordinary course of business.
(f) Non-competition. BUYER will not permit any of its officers,
directors, employees or Affiliates to, directly or indirectly, whether as a
principal, partner, shareholder, joint venturer, consultant, agent,
proprietor, creditor or otherwise, engage in any commercial activity or
pursuit whatsoever which may in any way be in competition or conflict with
the products and business which comprise the business of PC Dynamics and
BUYER as of the Closing Date.
(g) Additional Covenants. BUYER shall not, without the consent of PC
Dynamics:
(i) merge with or into or consolidate with any other entity,
or sell, lease or otherwise dispose of substantially all of its
assets;
(ii) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction; or
(iii) become subject to any agreement or instrument, which by
its terms would (under any circumstances) restrict BUYER' rights to
perform any of its obligations to PC Dynamics pursuant to the terms
of this Note.
5. Events of Default. (a) The occurrence of any one or more of the
following events ("Events of Default") shall in respect of this Note, at the
option of PC Dynamics, and without regard to any standstill agreement or
other prohibition relating to any of the following events, constitute a
default under this Note:
(i) Default in the payment of interest on or principal on this Note
when the same shall become due and payable by lapse of time, declaration or
otherwise;
(ii) Default in the observance or performance of any of the other
covenants or provisions of any of the Transaction Documents or default in
the observance or performance of any other provisions of this Note not
involving the payment of money which is not remedied within ten (10) days
after notice thereof to BUYER is given by PC Dynamics;
(iii) If BUYER becomes insolvent or bankrupt or admits in writing its
inability to pay its debts as they mature or makes an assignment for the
benefit of creditors, or if BUYER applies for or consents to the appointment
of a trustee or receiver for itself or for a major part of its properties or
assets, or shall voluntarily file a petition seeking reorganization or other
protection under the Federal bankruptcy laws;
(iv) If a trustee or receiver is appointed for BUYER or for the
major part of any of its properties or assets and the order of such
appointment is not discharged, vacated or stayed within thirty (30) days
after such appointment;
(v) If BUYER shall be adjudicated a bankrupt or a decree or order
approving as properly filed a petition or answer asking reorganization of
BUYER under the Federal bankruptcy laws, as now in effect or hereafter
amended, or under the laws of any state, shall be entered, and any such
decree or judgment or order shall not have been vacated or set aside within
thirty (30) days from the date of the entry or granting thereof;
(vi) the existing shareholders of PIC shall fail to own at least 51%
of the voting and ownership interests in PIC or BUYER shall fail to be a
wholly-owned subsidiary of PIC; or
(vii) If the obligation of any guarantor of this Note is limited or
terminated by operation of law or by the guarantor, or any such guarantor
becomes the subject of an insolvency proceeding under Federal bankruptcy
laws or under any other bankruptcy or insolvency law.
(b) Rights and Remedies Upon Default.
(i) When any Event of Default described above in this Section 5 has
occurred, BUYER agrees to give notice within two (2) days of such default to
PC Dynamics, such notice to be in writing and sent by registered or
certified mail or by telecopier.
(ii) When any Event of Default described above in Section 5 has
happened and is continuing uncured, (A) PC Dynamics may, by notice in
writing to BUYER, declare the principal of and accrued interest on this Note
to be immediately due and payable; and thereupon all principal and interest
shall become immediately due and payable, without further presentment,
protest, demand or notice or other legal process of any kind; and (B) PC
Dynamics may take any action or proceeding at law or in equity which it
deems advisable to collect and enforce payment of all amounts then due upon
this Note whether by reason of maturity or of such amounts or acceleration.
6. Assignment: Amendment: Waiver. This Note may not be assigned (by
operation of law or otherwise) by BUYER. This Note may only be amended in
writing duly executed by the parties hereto. No failure or delay on the
part of the holder of this Note or to exercise any power or right under this
Note shall operate as a waiver of such power or right or preclude other or
further exercise thereof or the exercise of any other power or right. No
waiver of any condition or performance will operate as a waiver of any
subsequent condition or obligation. BUYER hereby waives diligence,
presentment, demand for payment, notice of dishonor or acceleration, protest
and notice of protest, and any and all other notices or demands in
connection with delivery, acceptance, performance, default or enforcement of
this Note.
7. Notices. All notices or demands by any party relating to this Note
shall in writing in accordance with Section 9.8 of the Agreement.
8. Severability. If there is any provision of this Note or the
application thereof to any party or circumstances which shall be prohibited
by, or invalid under, such applicable law, such provision shall be
ineffective to the minimal extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
the Note, or the applications of such provisions to other parties or
circumstances.
9. Governing Law: Jurisdiction. This Note shall be governed by and
construed in accordance with the laws of the State of Illinois. Any legal
action or proceeding with respect to this Note shall be brought exclusively
in the courts of the State of Illinois or of the United States of America
within ▇▇▇▇ County, Illinois, and by execution and delivery of this Note,
BUYER hereto hereby covenants, for itself and in respect of its property, to
the jurisdiction of the aforesaid courts. BUYER hereby irrevocably waives
any objection, including without limitation, any objections to the laying of
venue or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Note or any document related hereto.
PC DYNAMICS OF TEXAS, INC.
/s/
By: __________________________________________
Title: _________________________________________
Address:
______________________________________________
______________________________________________
______________________________________________
