LOAN AGREEMENT
dated as of August 12, 1996
by and
between
XXXXX CORPORATION,
as "Borrower,"
and
Gabelli Funds, Inc.,
as "Lender"
LOAN AGREEMENT
This Loan Agreement (this "Agreement") dated as of August 12,
1996 is entered into by and between XXXXX CORPORATION, an Indiana corporation
("Borrower"), and Gabelli Funds, Inc., a New York corporation ("Lender").
RECITALS:
WHEREAS, Borrower desires Lender to extend a loan to Borrower in
such amount and on such terms as set forth herein which would be used by Xxxxx
PCS Corporation F ("PCSF"), a subsidiary of Borrower, to make loans to Aer Force
Communications B, L.P. ("Bidder") pursuant to a Loan Agreement dated as of the
date hereof ("Bidder Loan Agreement"), which will be used by Bidder to acquire
PCS licenses pursuant to the F-Block Auction; and
WHEREAS, Lender is prepared to make such Loan upon the terms and
subject to the conditions set forth herein only for the purposes referred to in
the preceding whereas clause.
AGREEMENT:
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Applicable Rate": An interest rate, compounded annually, equal
to 10% per annum.
"Business Day": A day other than a Saturday, Sunday or other day
on which commercial banks in New York are authorized or required by law to
close.
"Loan Documents": This Agreement, the Note, the Pledge and
Security Interest Agreement, and all other documents executed in connection with
this Agreement and/or the Loan.
"Maturity Date": August 12, 1997.
"Note": The promissory note substantially in the form of Exhibit
A hereto to be executed by Borrower, payable to the order of Lender.
"Pledge and Security Interest Agreement": The Pledge and
Security Interest Agreement substantedly in the form of Exhibit B hereto.
"Partnership Agreement": The Partnership Agreement of Borrower
dated as of July 26, 1996.
"Subsidiary": Any corporation of which fifty percent (50%) or
more of the issued and outstanding voting securities are, directly or
indirectly, owned by Borrower or any Subsidiary of Borrower or any other entity
of which fifty percent (50%) or more of the ownership interests are owned,
directly or indirectly, by Borrower or any Subsidiary of Borrower.
SECTION 1.02. Incorporation of Certain Terms By Reference.
Capitalized terms used herein but not otherwise defined shall have the meanings
specified in the Partnership Agreement as in effect on the date hereof.
ARTICLE II
THE LOAN
SECTION 2.01. The Initial Loan.
(a) The Loan. Lender agrees, on the terms and conditions
hereinafter set forth, to make a loan (the "Initial Loan") to Borrower in the
aggregate principal amount of Eleven Million, Eight Hundred Thousand Dollars
($11,800,000). The Initial Loan shall be made immediately prior to the date
that PCSF is required to make a loan to Bidder under the Bidder Loan Agreement.
(b) Mandatory Prepayment.
(1) If after the termination of the F-Block Auction, PCSF
is repaid any funds pursuant to Sections 2.01(b)(1), 2.01(b)(2) or 2.01(b)(3)
of the Bidder Loan Agreement, Borrower shall prepay the Initial Loan in an
amount equal to the amount prepaid.
(2) Any prepayment hereunder shall be applied to the
payment of principal.
(c) Supplemental Loans. If PCSF is required to make any
Supplemental Loans to Bidder pursuant to Section 2.01(c) of the Bidder Loan
Agreement, Lender agrees to make loans ("Supplemental Loans") to Borrower from
time to time in an aggregate principal amount up to the amount prepaid by
Borrower pursuant to Section 2.01(b)(1) for such purpose.
(d) Special Fee. If Borrower has not prepaid the Loan in full
within five Business Days after the end of the F-Block Auction, Borrower shall
pay Lender a special fee equal to 10% of the Net Profits of PCSF's partnership
interest in Bidder, from time to time as and when realized. Net Profits shall
not include any amounts received by PCSF pursuant to the Bidder Loan Agreement
and shall be net of any losses of PCSF under the Bidder Loan Agreement. For
purposes of computing Net Profits, capital contributions by PCSF to Bidder shall
be deemed to be loans to Bidder under the Bidder Loan Agreement and interest
under the Bidder Loan Agreement shall include deemed commitment fees and
interest on such capital contributions. Net Profits shall mean and shall be
deemed to be realized at the time of (i) any profits received by PCSF from the
sale, directly or indirectly, of all or a substantial portion of the assets of
Bidder and the distribution of the proceeds to the partners (after payments of
the principal and interest under the Bidder Loan Agreement), (ii) any payments
or distributions by Bidder to Borrower or its Affiliates, including loans (other
than principal, interest and other amounts as contemplated in the Bidder Loan
Agreement and the Expenses Agreement referred to therein) including loans, (iii)
the proceeds from any sale, directly or indirectly, including a merger or
similar transaction, by Borrower of any of its partnership interest in Bidder,
and/or (iv) the net proceeds from any sale of the stock of PCSF, whether by the
existing stockholder or an Affiliate, to a person or entity that is not its
Affiliate of PCSF. The term "Affiliate" shall have the meaning in Rule 12b-2
under the Securities Exchange Act of 1934, as amended. Any dispute under this
Section 2(d), including without limitation the amount of profit, the value of
any non-cash items or other matters, if the parties cannot otherwise agree,
shall be submitted to binding arbitration under the rules of the American
Arbitration Association.
(e) Commitment Fee. At maturity (whether at the Maturity Date,
by acceleration or otherwise), Borrower shall pay to Lender a commitment fee
equal to 1% per annum on the principal amount of Lender's commitment to lend
funds to Borrower under this Agreement, including funds actually lent.
SECTION 2.02. The Note. The Loan made by Lender pursuant hereto
shall be evidenced by the Note, representing the obligation of Borrower to pay
the aggregate unpaid principal amount of the Loan made by Lender, with interest
thereon as prescribed in Section 2.05.
SECTION 2.03. Payment of Principal. The entire unpaid principal
amount of the Loan, together with all accrued and unpaid interest thereon, shall
be due and payable on the Maturity Date.
SECTION 2.04. Optional Prepayment. Borrower may, at its option,
prepay the Loan, without premium except as provided in the Note, in whole or in
part at any time and from time to time; provided that Lender shall have received
from Borrower notice of any such prepayment at least five (5) Business Days
prior to the date of the proposed prepayment, in each case specifying the date
and the amount of prepayment. Partial payments hereunder shall be in an
aggregate principal amount of $50,000 or any integral multiple thereof. Any
such prepayments shall be applied to the payment of any accrued and unpaid
interest before any application to principal.
SECTION 2.05. Interest Rate and Payment Dates.
(a) Interest Rate and Payment. The Loan shall bear interest on
the unpaid principal amount thereof from the date made through maturity (whether
at the Maturity Date, by acceleration or otherwise) at the Applicable Rate. All
accrued and unpaid interest on the Loan shall be compounded annually and payable
on the Maturity Date. Interest on the Loan shall be computed on the basis of
a 360-day year for the actual number of days elapsed. In computing interest on
the Loan, the date of the making of the Loan shall be included and the date of
payment of the Loan shall be excluded.
(b) Default Interest. Upon the occurrence, and during the
continuation of, any Event of Default, the principal amount of the Loan and any
interest accrued and unpaid thereon shall bear interest at the Applicable Rate
plus 3% per annum.
SECTION 2.06. Security, Other.
(a) Security. All amounts payable pursuant to the Loan
Documents shall be secured to the extent permitted by law by a (i) a pledge of
the Note dated August 12, 1996 by Bidder to PCSF under the Bidder Loan
Agreement, (ii) a first security interest in PCSF's limited partnership interest
in Bidder and (iii) a pledge of all Borrower's, or its Subsidiaries', stock
interest in Xxxxx Telephone Corporation, Xxxxx Entertainment Corporation and
Xxxxx Entertainment Corporation II, all as set forth in Exhibit B hereto.
(b) Not Exceed Maximum Rate. Notwithstanding the foregoing,
neither interest on the Loan nor commitment and other fees shall exceed the
highest rate permitted by applicable law.
ARTICLE III
GENERAL PROVISIONS CONCERNING THE LOAN
SECTION 3.01. Payments. Borrower shall make each payment of
principal, interest and fees hereunder and under the Note, without setoff or
counterclaim, not later than 11:00 a.m. New York City time, on the day when due,
in lawful money of the United States of America to Lender by wire transfer sent
to an account designated in writing from time to time by Lender, in immediately
available funds. Payments received after such time shall be deemed to have been
paid by Borrower on the next succeeding Business Day.
SECTION 3.02. Payment on Non-Business Days. If any payment to
be made hereunder or under the Note shall be stated to be due on a day which is
not a Business Day, such payment may be made on the next succeeding Business
Day, and with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
SECTION 3.03. Conditions; Documentation. As a condition to the
making of the Loan, Borrower will execute and deliver or cause to be executed
and delivered to Lender such documents, instruments and certificates as Lender
may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
SECTION 4.01. Organization. Borrower is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Indiana, and has full power and authority to conduct its business and to
enter into and perform its obligations under the Loan Documents.
SECTION 4.02. Authorization. Except for approval by
Borrower's Board of Directors as contemplated in Section 8.15, the execution,
delivery and performance of the Loan Documents by Borrower has been duly
authorized by all necessary corporate action on the part of Borrower, and each
Loan Document has been duly executed by Borrower and delivered by Borrower to
Lender and constitutes the legal, valid and binding obligation of Borrower,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
SECTION 4.03. No Conflict. The execution, delivery and
performance of each Loan Document by Borrower, and the compliance with the terms
and conditions hereof and thereof by Borrower, does not, with or without the
giving of notice or the lapse of time or both, conflict with, breach the terms
or conditions of, constitute a default under, or violate the (i) any agreement
to which Borrower is a party, or (ii) any judgment, decree, order, law, rule or
regulation applicable to Borrower, except that no representation or warranty is
made as with respect to any remedy which Lender may have under the Pledge and
Security Interest Agreement.
SECTION 4.04. Litigation. There is no unsatisfied judgment,
award, order, writ, injunction, arbitration decision or decree outstanding or
any litigation, proceeding, claim or investigation pending or, to the best
knowledge of Borrower, threatened against Borrower which may adversely affect
the ability of Borrower to enter into and perform its obligations under Loan
Documents.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants that so long as any of the Loan or any
obligation of Borrower under the Loan Documents remains outstanding, and until
payment in full of all obligations of Borrower subject hereto, Borrower shall:
SECTION 5.01. Punctual Payments. Punctually pay the interest
and principal in respect of the Loan and all other obligations under any of the
Loan Documents at the times and place and in the manner specified in the Loan
Documents.
SECTION 5.02. Accounting Records. Maintain adequate books
and records in accordance with generally accepted accounting principles
consistently applied ("GAAP"), and permit any representative of Lender, at any
reasonable time, to inspect, audit and examine such books and records, to make
copies of the same, and to inspect the properties of Borrower.
SECTION 5.03. Taxes and Other Liabilities. Pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
or personal and including federal and state income taxes, except such as
Borrower may in good faith contest or as to which a bona fide dispute may arise,
provided provision is made therefore in the financial statements of Borrower to
the extent required by generally accepted accounting principles.
SECTION 5.04. Notification. Promptly give notice in writing
to Lender of (i) the occurrence of any Event of Default or any event reasonably
likely to result in the occurrence of an Event of Default, or (ii) any material
adverse change in the business, assets, condition (financial or otherwise) of
Borrower.
ARTICLE VI
NEGATIVE COVENANTS
Borrower further covenants that so long as the Loan or any
obligation under the Loan Documents remains outstanding, and until payment in
full of all obligations of Borrower subject hereto, Borrower will not without
the prior written consent of Lender:
SECTION 6.01. Use of Proceeds. Use any of the proceeds of
the Loan except for the purposes stated in the first Whereas Clause and Section
2.01 hereof.
SECTION 6.02. Merger; Consolidation, Etc. Merge, consolidate
or combine with any other Person or sell all or substantially all of Borrower's
assets or properties.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. The occurrence of any of the
following events shall constitute an event of default hereunder (an "Event of
Default"):
(a) Borrower shall fail to pay any portion of the principal or
interest of the Loan or other amount payable hereunder or under the Note when
due; or
(b) Any representation or warranty made by Borrower herein or
in connection with any other Loan Document, shall prove to have been incorrect
in any material respect when made; or
(c) Borrower shall default in any material respect in the timely
performance of or compliance with any term or condition contained in any Loan
Document, and such default shall not have been remedied or waived for twenty
(20) Business Days after such failure; or
(d) Borrower shall (i) have an order for relief entered with
respect to it under any federal or state bankruptcy law or any similar law
relating to the enforcement of creditors rights generally (a "Bankruptcy Law")
(ii) not pay, or admit in writing his inability to pay its debts generally as
they become due, (iii) make an assignment for the benefit of its creditors, (v)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, conservator, trustee, examiner, liquidator or similar official for
his or any substantial part of his property, (vi) institute any proceeding
seeking an order for relief under any Bankruptcy Law or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vii) take any action to
authorize or effect any of the foregoing actions, or (viii) fail to contest in
good faith any appointment or proceeding described in this Subsection 7.01(d);
or
(e) A receiver, custodian, conservator, trustee, examiner,
liquidator or similar official shall be appointed for Borrower or any
substantial part of its property, or a proceeding described in Subsection
7.01(d)(v) shall be instituted against Borrower and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days;
(f) The FCC shall have revoked, or has instituted proceedings
to revoke, any PCS Licenses granted to the Bidder in the F-Block Auction; or
(g) The Bidder shall default in any payment to Borrower under
the Bidder Loan Agreement.
SECTION 7.02. Acceleration; Remedies Upon Occurrence of Event
of Default. Upon the occurrence of any Event of Default described in clause
(d), or (e), of Section 7.01, the Loan (together with accrued interest thereon)
and all other amounts owing under this Agreement, the Note and the other Loan
Documents shall automatically become due and payable, and upon the occurrence
of any other Event of Default, Lender may, by notice to Borrower, declare the
Loan (together with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Costs, Expenses and Attorneys' Fees. Borrower
shall pay to Lender immediately upon demand the full amount of all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by Lender in
connection with (a) the preparation of amendments and waivers to the Loan
Documents, (b) the enforcement of Lender's rights and/or the collection of any
amounts which become due to Lender under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation any action for declaratory relief.
SECTION 8.02. Amendments, Etc. No amendment or waiver of any
provision of the Loan Documents nor consent to any departure by Borrower or
Lender therefrom, shall in any event be effective unless the same shall be in
writing and signed by the other party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 8.03. Notices, Etc. Except as otherwise set forth in
this Agreement, all notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex or facsimile communication)
and mailed or telegraphed or telexed or sent by facsimile or delivered, to
Borrower or Lender at their respective addresses set forth on the signature page
hereof; or, as to any other Person, at such other address as shall be designated
by such Person in a written notice to the other parties. All such notices and
communications shall be effective when deposited in the mails, sent by telex or
sent by facsimile, respectively, except that notices and communications to
Lender pursuant to Article II or VII shall not be effective until received by
Lender.
SECTION 8.04. Indemnification. Borrower agrees to indemnify and
hold harmless Lender and its respective affiliates, directors, officers,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including without
limitation reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with the Loan Documents, the proposed or actual use
of the proceeds therefrom or any of the other transactions contemplated hereby
or thereby, whether or not such investigation, litigation or proceeding is
brought by Borrower, creditors of Borrower, an Indemnified Party or any other
Person or an Indemnified Party is otherwise a party thereto, and whether or not
the transactions contemplated hereby or by any other Loan Document are
consummated, except to the extent such claim, damage, loss, liability or
expenses is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
SECTION 8.05. No Waiver; Remedies. No failure on the part of
Lender or Borrower to exercise, and no delay in exercising, any right under any
of the Loan Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any right under any of the Loan Documents preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.06. Assignments and Participation. Lender may sell,
assign, transfer, negotiate or grant participation to any other party in all or
part of the obligations of Borrower outstanding under the Loan Documents without
Borrower's prior written consent. Lender may, in connection with any actual or
proposed assignment or participation, disclose to the actual or proposed
assignee or participant, any information relating to Borrower.
SECTION 8.07. Effectiveness; Binding Effect; Governing Law.
This Agreement and each other Loan Document shall be binding upon and inure to
the benefit of Borrower, Lender and their respective successors and assigns,
except that Borrower shall not have the right to assign his rights hereunder or
any interest herein without the prior written consent of Lender. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CHOICE OF
LAW DOCTRINE.
SECTION 8.08. Waiver of Jury Trial. BORROWER AND LENDER HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. LENDER AND BORROWER EACH
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. LENDER AND BORROWER FURTHER WARRANT AND REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS,
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
SECTION 8.09. Consent to Jurisdiction; Venue; Agent for Service
of Process. All judicial proceedings brought against Borrower with respect to
the Loan Documents may be brought in any state or Federal court of competent
jurisdiction in the State of New York, and by execution and delivery of this
Agreement, Borrower accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with the Loan Documents. Borrower irrevocably waives any right it
may have to assert the doctrine of forum non conveniens or to object to venue
to the extent any proceeding is brought in accordance with this Section 6.09.
SECTION 8.10. Entire Agreement. The Loan Documents embody the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
SECTION 8.11. Separability of Provisions. In case any one or
more of the provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
SECTION 8.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 8.13. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default if such action
is taken or condition exists.
SECTION 8.14. Survival of Representations. All representations
and warranties of Borrower contained in any Loan Document shall survive delivery
of the Note and the making of the Loan herein contemplated.
SECTION 8.15 Board Ratification. If the Board of Directors of
Borrower shall not ratify this Agreement by August 26, 1996, Borrower shall
cause the Subsidiary to exercise its rights under Section 8.16 of the Bidder
Loan Agreement and, as soon as it receives payment of its loan to Bidder, shall
promptly repay the Loan in full under this Agreement. At that time this
Agreement (including without limitation Section 2.01(d)) shall terminate.
IN WITNESS OF THEIR AGREEMENT, the parties have executed this
Agreement as of the date first set forth above.
"Lender"
GABELLI FUNDS, INC.
By: _______________________________
Name:
Title:
"Borrower":
XXXXX CORPORATION
By: _______________________________
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
PROMISSORY NOTE
$11,800,000 August 12, 1996
FOR VALUE RECEIVED, XXXXX CORPORATION, an Indiana corporation ("Borrower"),
promises to pay to Gabelli Funds, Inc. ("Lender") or order, by wire transfer
sent to an account designated in writing to Borrower from time to time by the
holder hereof (or in such other manner or at such other place as the holder
hereof shall notify Borrower in writing), the principal amount of Eleven
Million, Eight Hundred Thousand Dollars ($11,800,000) or so much thereof as may
have been loaned pursuant to the Loan Agreement, with interest from the date
hereof on the unpaid principal balance hereunder at the rate of interest set
forth in that certain Loan Agreement of even date herewith between Borrower and
Lender (the "Loan Agreement"), including, without limitation, default interest
as set forth in Section 2.04 of the Loan Agreement. (Capitalized terms used
herein and not otherwise defined shall have the meanings given to such terms in
the Loan Agreement). The principal amount under this Note, and all accrued and
unpaid interest thereon, shall be due and payable on the Maturity Date, unless
the Maturity Date is extended or otherwise modified pursuant to the Loan
Agreement.
Each payment under this Note shall first be credited against
accrued and unpaid interest, and the remainder shall be credited against
principal. This Note may be prepaid in whole or in part at any time, after five
(5) Business Days written notice of Borrower's intention to make any such
prepayment, which notice shall specify the date and amount of such prepayment.
Partial payment hereunder shall be in an aggregate principal amount of Fifty
Thousand Dollars ($50,000) or any integral multiple thereof. The written notice
of Borrower to make a prepayment hereunder shall create an obligation of
Borrower to pay the amount specified on the date specified in such notice. Any
prepayment shall be without penalty except that interest shall be paid to the
date of payment on the principal amount prepaid.
Principal and interest shall be payable in lawful money of the
United States of America.
Upon the occurrence of an Event of Default under the Loan
Agreement the holder hereof may, at its option, without notice to or demand upon
Borrower or any other party, except as otherwise provided in the Loan Agreement,
declare immediately due and payable the entire principal balance hereof together
with all accrued and unpaid interest hereon, plus any other amounts then owing
pursuant to this Note or the Loan Agreement, whereupon the same shall be
immediately due and payable. On each anniversary of the date of any default
hereunder and while such default is continuing, all interest which has become
payable and is then delinquent shall, without curing the default hereunder by
reason of such delinquency, be added to the principal amount due under this
Note, and shall thereafter bear interest at the same rate as is applicable to
principal. In no event shall such interest or other amounts be charged under
this Note which would violate any applicable usury law.
If any default occurs in any payment due under this Note,
Borrower promises to pay all reasonable costs and expenses, including reasonable
attorneys' fees and expenses, incurred by each holder hereof in collecting or
attempting to collect the indebtedness under this Note, whether or not any
action or proceeding is commenced, and hereby waives the right to plead any and
all statutes of limitation as a defense to a demand hereunder to the full extent
permitted by law. None of the provisions hereof and none of the holders' rights
or remedies hereunder on account of any past or future defaults shall be deemed
to have been waived by the holders' acceptance of any past due installments or
by any indulgence granted by the holder to Borrower.
Borrower waives presentment, demand, protest and notice thereof
or of dishonor, and agree that they shall remain liable for all amounts due
hereunder notwithstanding any extension of time or change in the terms of
payment of this Note granted by any holder hereof, any change, alteration or
release of any property now or hereafter securing the payment hereof or any
delay or failure by the holder hereof to exercise any rights under this Note or
the Loan Agreement.
All amounts payable by Borrower pursuant to the Loan documents shall be
secured by a security interest in certain assets as provided for in the Loan
Agreement.
Each Loan, or other credit extension made under this Note will be evidenced
by a written record made by Lender indicating the amount and date of such
transaction. Such records of Lender shall be deemed by Borrower and Lender to
be sufficient evidence of loans made, or credit extended under this Note.
This Note shall be governed by, and construed in accordance with, the laws
of the State of New York without giving effect to its choice of law doctrine.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed the day
and year first above written.
XXXXX CORPORATION
By: _________________________
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
TABLE OF CONTENTS
Page
ARTICLE IDEFINITIONS . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . .1
SECTION 1.02. Incorporation of Certain Terms By Reference. . .2
ARTICLE IITHE LOAN . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.01. The Initial Loan . . . . . . . . . . . . . . . .2
SECTION 2.03. Payment of Principal . . . . . . . . . . . . . .4
SECTION 2.04. Optional Prepayment . . . . . . . . . . . . . .4
SECTION 2.05. Interest Rate and Payment Dates . . . . . . . .4
ARTICLE IIIGENERAL PROVISIONS CONCERNING THE LOAN. . . . . . . .5
SECTION 3.01. Payments. . . . . . . . . . . . . . . . . . . .5
SECTION 3.02. Payment on Non-Business Days. . . . . . . . . .5
SECTION 3.03. Conditions; Documentation . . . . . . . . . . .5
ARTICLE IVREPRESENTATIONS AND WARRANTIES . . . . . . . . . . . .6
SECTION 4.01. Organization. . . . . . . . . . . . . . . . . .6
SECTION 4.02. Authorization . . . . . . . . . . . . . . . .6
SECTION 4.03. No Conflict . . . . . . . . . . . . . . . . .6
SECTION 4.04. Litigation. . . . . . . . . . . . . . . . . .6
ARTICLE V AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . .7
SECTION 5.01. Punctual Payments . . . . . . . . . . . . . .7
SECTION 5.02. Accounting Records. . . . . . . . . . . . . .7
SECTION 5.03.. . . . . . . . . . . . . . . . . . . . . . . . .7
Taxes and Other Liabilities. . . . . . . . . . . . . . .7
SECTION 5.04. Notification. . . . . . . . . . . . . . . . .7
SECTION 6.01. Use of Proceeds . . . . . . . . . . . . . . .8
ARTICLE VIIEVENTS OF DEFAULT . . . . . . . . . . . . . . . . . .8
SECTION 7.01. Events of Default . . . . . . . . . . . . . . .8
SECTION 7.02. Acceleration; Remedies Upon Occurrence of Event of Default9
ARTICLE VIIIMISCELLANEOUS. . . . . . . . . . . . . . . . . . . .9
SECTION 8.01. Costs, Expenses and Attorneys' Fees . . . . . .9
SECTION 8.02. Amendments, Etc . . . . . . . . . . . . . . . 10
SECTION 8.03. Notices, Etc. . . . . . . . . . . . . . . . . 10
SECTION 8.04. Indemnification.. . . . . . . . . . . . . . . 10
SECTION 8.05. No Waiver; Remedies . . . . . . . . . . . . . 11
SECTION 8.06. Assignments and Participation . . . . . . . . 11
SECTION 8.07. Effectiveness; Binding Effect; Governing Law. 11
SECTION 8.08. Waiver of Jury Trial. . . . . . . . . . . . . 11
SECTION 8.09. Consent to Jurisdiction; Venue; Agent for Service of Process12
SECTION 8.10. Entire Agreement. . . . . . . . . . . . . . . 12
SECTION 8.11. Separability of Provisions. . . . . . . . . . 12
SECTION 8.12. Execution in Counterparts . . . . . . . . . . 12
SECTION 8.13. Independence of Covenants . . . . . . . . . . 12
SECTION 8.14. Survival of Representations. . . . . . . . . . 13
