Exhibit 10.67
FORM OF CONVERTIBLE SUBORDINATED
PROMISSORY NOTE
THE SECURITY REPRESENTED HEREBY WAS ORIGINALLY ISSUED ON
DECEMBER 14, 2001. THE SECURITY REPRESENTED HEREBY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR UNDER THE SECURITIES LAWS OF ANY STATE AND
CANNOT BE OFFERED, TRANSFERRED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR
AN EXEMPTION THEREFROM. THE TRANSFER OF SUCH SECURITY IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE SUBORDINATED
NOTE PURCHASE AGREEMENT, DATED AS OF DECEMBER 14, 2001,
BETWEEN THE ISSUER (THE "COMPANY") AND THE SHAREHOLDER
PURCHASERS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE
THE TRANSFER OF SUCH SECURITY UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON
WRITTEN REQUEST, A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT
CHARGE.
CONVERTIBLE SUBORDINATED
PROMISSORY NOTE
$_____,000 December 14, 2001
Xxxxxx Boats & Motors, Inc., a Texas corporation (the "Company"),
hereby promises to pay to the order of ______________ (the "Shareholder
Purchaser"), the principal amount of $_____,000 together with interest thereon
calculated from the date hereof in accordance with the provisions of this Note.
This Note was issued pursuant to a Subordinated Note Purchase
Agreement, dated as of December 14, 2001 (the "Purchase Agreement"), between the
Company and certain Shareholder Purchasers, including the Shareholder Purchaser
of this Note. This Note is one of the "Notes" referred to in the Purchase
Agreement. The Purchase Agreement contains terms governing the rights of the
holder of this Note, and all provisions of the Purchase Agreement are
incorporated herein in full by reference. Unless otherwise indicated herein,
capitalized terms used in this Note which are not otherwise defined have the
same meanings set forth in the Purchase Agreement.
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1. Payment of Interest. Except as otherwise expressly provided in
Section 10.2 of the Purchase Agreement, interest shall accrue at the greater of
(i) 10.75% or (if less) at the highest rate then permitted under applicable law.
The Company shall pay to the holder of this Note all accrued interest on the
last day of each calendar quarter beginning December 31, 2001, provided that if
such day is not a business day, payment shall be due on the next business day.
Unless prohibited under applicable law, any accrued interest which is not paid
on the date on which it is payable shall bear interest at the same rate at which
interest is then accruing on the principal amount of this Note. Any accrued
interest which for any reason has not theretofore been paid shall be paid in
full on the date on which the final principal payment on this Note is paid.
Interest shall accrue on any principal payment due under this Note and, to the
extent permitted by applicable law, on any interest which has not been paid on
the date on which it is payable until such time as payment therefore is actually
delivered to the holder of this Note. Interest on this Note shall be computed on
the basis of a 365 or 366 day year, as applicable.
2. Payment of Principal on Note.
(a) Scheduled Payments. The Company shall pay all outstanding principal
and interest due under the Note on December 14, 2004.
(b) Optional Prepayments.
(i) Prior to receipt of a conversion notice from the holder of this
Note, the Company may prepay this Note in whole or in part by paying the
principal and accrued interest thereon in full, plus a premium on such principal
amount so prepaid at the following rates: 5% through the first anniversary of
the Closing Date and 3% thereafter; provided that such prepayment is not
prohibited by any Senior Indebtedness or the Brunswick Note. Upon receipt of a
conversion notice from the holder of this Note, all of the Company's prepayment
rights shall be deemed lapsed and unexercised.
(ii) The Company shall send written notice of its election under this
paragraph 2(b) to make an optional prepayment on the Notes to the holder of this
Note by registered or certified mail, return receipt requested, at least 30 days
prior to the date of prepayment and prior to receiving a conversion notice from
the holder of this Note. On the date of prepayment, the Company shall deliver to
each holder of the Notes in person or by registered or certified mail, return
receipt requested, a cashier's or certified check for the full amount of the
Notes which the Company intends to prepay on such holder's Note plus interest
accrued on the outstanding principal amount of such holder's Note through the
date ten days prior to the date of prepayment specified in the Company's notice.
(c) Conversion. Notwithstanding any provision contained in this
paragraph 2, the holder of this Note may convert all or any portion of the
outstanding principal amount of this Note pursuant to paragraph 3 until such
time as such amount has been paid by the Company; provided that if the holder
has received a notice of prepayment pursuant to paragraph 2(b) above, within 10
days, the holder may deliver a conversion notice to the Company for the portion
of the Note designated for prepayment; if the holder does not timely deliver
such a conversion notice, it may not convert the portion of the Note designated
for prepayment unless the prepayment is not made in accordance with the terms of
paragraph 2(b).
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(d) Pro Rata Payment. The Company agrees that any payments (including
optional prepayments as discussed above in paragraph 2(b) above) to the holders
of the Shareholder Purchaser Notes (whether for principal, interest or
otherwise) shall be made pro rata among such holders based upon the aggregate
unpaid principal amount of the Notes held by each such holder. If any holder of
a Note otherwise obtains any payment (whether voluntary, involuntary, by
application of offset or otherwise) of principal or interest on any Note in
excess of such holder's pro rata share of payments obtained by all holders of
the Notes, such holder shall purchase from the other holders of the Notes such
participation in the Notes held by them as is necessary to cause such holders to
share the excess payment ratably among each of them as provided in this
paragraph.
3. Conversion.
(a) Conversion Procedure.
(i) At any time and from time to time after June 12, 2002 and prior to
the payment of this Note in full, the holder of this Note may convert all or any
portion of the outstanding principal amount of this Note into a number of shares
of the Conversion Stock (excluding any fractional share) determined by dividing
the principal amount designated by such holder in a written notice of intention
to convert as the amount to be converted, by the Conversion Price then in
effect. The holder of this Note shall give the Company 30 days notice of its
intention to convert.
(ii) Each such conversion of this Note shall be deemed to have been
effected as of the close of business on the date on which this Note has been
surrendered at the principal office of the Company. At such time as such
conversion has been effected, the rights of the holder of this Note as such
holder to the extent of the conversion shall cease, and the Person or Persons in
whose name or names any certificate or certificates for shares of Conversion
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Conversion Stock represented
thereby.
(iii) As soon as possible after a conversion has been effected (but in
any event within five business days), the Company shall deliver to the
converting holder:
(A) a certificate or certificates representing the number of
shares of Conversion Stock (excluding any fractional share) issuable by
reason of such conversion in such name or names and such denomination
or denominations as the converting holder has specified;
(B) payment in an amount equal to the sum of all accrued
interest with respect to the principal amount converted, which has not
been paid prior thereto, plus the amount payable under subparagraph
(iv) below; and
(C) a new Note representing any portion of the principal
amount which was represented by the Note surrendered to the Company in
connection with such conversion but which was not converted.
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(iv) If any fractional share of Conversion Stock would, except for the
provisions hereof, be deliverable upon conversion of this Note, the Company, in
lieu of delivering such fractional share, shall pay an amount equal to the
Market Price of such fractional share as of the date of such conversion.
(v) The issuance of certificates for shares of Conversion Stock upon
conversion of this Note shall be made without charge to the holder hereof for
any domestic documentary, stamp, transfer, excise or similarly related
transactional tax relating to the issuance of securities in respect thereof or
other cost incurred by the Company in connection with such conversion and the
related issuance of shares of Conversion Stock. Upon conversion of this Note,
the Company shall take all such actions as are necessary in order to ensure that
the Conversion Stock issuable with respect to such conversion shall be validly
issued, fully paid and nonassessable.
(vi) The Company shall not close its books against the transfer of
Conversion Stock issued or issuable upon conversion of this Note in any manner
which interferes with the timely conversion of this Note. The Company shall
assist and cooperate with any holder of this Note required to make any
governmental filings or obtain any governmental approval prior to or in
connection with the conversion of this Note (including, without limitation,
making any filings required to be made by the Company).
(vii) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Conversion Stock, solely for the purpose
of issuance upon the conversion of the Note, such number of shares of Conversion
Stock issuable upon the conversion of all outstanding Notes. All shares of
Conversion Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges.
The Company shall take all such actions as may be necessary to assure that all
such shares of Conversion Stock may be so issued without violation of any
applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which shares of Conversion Stock may be listed (except
for official notice of issuance which shall be immediately delivered by the
Company upon each such issuance).
(b) Conversion Price. The initial Conversion Price shall be $2.4594. If
and whenever on or after the original date of issuance of this Note the Company
issues or sells, or in accordance with paragraph 3(c) is deemed to have issued
or sold, any shares of Common Stock for a consideration per share less than the
Conversion Price in effect immediately prior to such time, the Conversion Price
shall be reduced to the Conversion Price determined by dividing (A) an amount
equal to the sum of (x) the product derived by multiplying the Conversion Price
immediately prior to such issue or sale by the number of shares of Common Stock
Deemed Outstanding immediately prior to such issue or sale, plus (y) the
consideration, if any, received by the Company upon such issue on sale, by (B)
the number of shares of Common Stock Deemed Outstanding immediately after such
issue or sale.
(c) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under paragraph 3(b), the following
shall be applicable:
(i) Issuance of Rights or Options. If the Company in any manner grants
any rights or options to subscribe for or to purchase Common Stock or any stock
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or other securities convertible into or exchangeable for Common Stock (such
rights or options being herein called "Options" and such convertible or
exchangeable stock or securities being herein called "Convertible Securities")
and the price per share for which Common Stock is issuable upon the exercise of
such Options or upon conversion or exchange of such Convertible Securities is
less than the Conversion Price in effect immediately prior to the time of the
granting of such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For purposes of this
paragraph, the "price per share for which Common Stock is issuable upon exercise
of such Options or upon conversion or exchange of such Convertible Securities"
is determined by dividing (A) the total amount, if any, received or receivable
by the Company as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the Company upon
the exercise of all such Options, plus in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or sale of such
Convertible Securities and the conversion or exchange thereof, by (B) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options. No adjustment of the Conversion
Price shall be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities. Notwithstanding the foregoing, there shall be no adjustment pursuant
to this paragraph (i) with respect to grants of options to employees pursuant to
employee benefit plans as in effect on the Closing Date hereof.
(ii) Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the
Conversion Price in effect immediately prior to the time of such issue or sale,
then the maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to be outstanding
and to have been issued and sold by the Company for such price per share. For
the purposes of this paragraph, the "price per share for which Common Stock is
issuable upon such conversion or exchange" is determined by dividing (A) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
adjustment of the Conversion Price shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon exercise of
any Options for which adjustments of the Conversion Price had been or are to be
made pursuant to other provisions of this paragraph 3(c), no further adjustment
of the Conversion Price shall be made by reason of such issue or sale.
(iii) Change in Option Price or Conversion Rate. If the purchase price
provided for in any Option, the additional consideration (if any) payable upon
the issue, conversion or exchange of any Convertible Security, or the rate at
which any Convertible Security is convertible into or exchangeable for Common
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Stock changes at any time, the Conversion Price in effect at the time of such
change shall be readjusted to the Conversion Price which would have been in
effect at such time had such Option or Convertible Security originally provided
for such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold;
provided that if such adjustment of the Conversion Price would result in an
increase in the Conversion Price then in effect, such adjustment shall not be
effective until 30 days after written notice thereof has been given to all
holders of the Notes.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities without the exercise of such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
to the Conversion Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination, never
been issued; provided that if such expiration or termination would result in an
increase in the Conversion Price then in effect, such increase shall not be
effective until 30 days after written notice thereof has been given to all
holders of the Notes.
(v) Calculation of Consideration Received. If any Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or
sold for cash, the consideration received therefore shall be deemed to be the
net amount received by the Company therefore. In case any Common Stock, Options
or Convertible Securities are issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Company shall be the Market Price thereof as of the date of receipt. In case
any Common Stock, Options or Convertible Securities are issued to the owners of
the non-surviving entity in connection with any merger in which the Company is
the surviving corporation, the amount of consideration therefore shall be deemed
to be the fair value of such portion of the net assets and business of the
non-surviving corporation as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash and securities shall be determined jointly by the Company and
the Majority Noteholders. If such parties are unable to reach agreement within a
reasonable period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Majority Noteholders. The determination
of such appraiser shall be final and binding upon the parties, and the fees and
expenses of such appraiser shall be borne by the Company.
(vi) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options shall be deemed to
have been issued for a consideration of $.01.
(vii) Treasury Shares. The number of shares of Common Stock outstanding
at any given time does not include shares owned or held by or for the account of
the Company or any Subsidiary, and the disposition of any shares so owned or
held shall be considered an issue or sale of Common Stock.
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(viii) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
(d) Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and if the Company at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased.
(e) Reorganization, Reclassification, Consolidation, Merger or Sale. If
any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets to another Person or
other transaction (collectively, any "Organic Change") is effected in such a way
that holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock, then, prior to the consummation of such Organic
Change, lawful and adequate provision (in form and substance satisfactory to the
Majority Noteholders) shall be made whereby each of the holders of the Notes
shall thereafter have the right to acquire and receive in lieu of or addition to
(as the case may be) shares of Conversion Stock immediately theretofore
acquirable and receivable upon the conversion of such holder's Note, such shares
of stock, securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Conversion Stock immediately theretofore
acquirable and receivable upon conversion of such holder's Note had such Organic
Change not taken place. In any such case, appropriate provision (in form and
substance reasonably satisfactory to the Majority Noteholders) shall be made
with respect to such holder's rights and interests to insure that the provisions
of this paragraph 3 and paragraphs 4 and 5 shall thereafter be applicable in
relation to any shares of stock, securities or assets thereafter deliverable
upon the conversion of the Notes (including, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing entity
is other than the Company, an immediate adjustment of the Conversion Price to
the value for the Common Stock reflected by the terms of such consolidation,
merger or sale and a corresponding immediate adjustment in the number of shares
of Conversion Stock acquirable and receivable upon conversion of the Notes, if
the value so reflected is less than the Conversion Price in effect immediately
prior to such consolidation, merger or sale.) The Company shall not effect any
such consolidation, merger or sale, unless prior to the consummation thereof,
the successor entity (if other than the Company) resulting from consolidation or
merger or the entity purchasing such assets assumes by written instrument (in
form reasonably satisfactory to Majority Noteholders), the obligation to deliver
to each such holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to acquire.
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(f) Certain Events. If any event occurs of the type contemplated by the
provisions of this paragraph 3 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
board of directors shall make an appropriate adjustment in the Conversion Price
so as to protect the rights of the holders of the Notes; provided that no such
adjustment shall increase the Conversion Price as otherwise determined pursuant
to this paragraph 3 or decrease the number of shares of Conversion Stock
issuable upon conversion of the Notes then outstanding.
(g) Notices.
(i) Immediately upon any adjustment of the Conversion Price, the
Company shall send written notice thereof to the holder of this Note, setting
forth in reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall send written notice to the holder of this Note
at least 20 days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Organic Change,
dissolution or liquidation.
(iii) The Company shall also give at least 20 days prior written notice
of the date on which any Organic Change, dissolution or liquidation shall take
place.
4. Liquidating Dividends. If the Company declares a dividend upon the
Common Stock payable otherwise than in cash out of earnings or earned surplus
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then the Company shall pay to the holders of
the Notes at the time of payment thereof the Liquidating Dividend which would
have been paid to the holder of this Note on the Conversion Stock had this Note
been fully converted immediately prior to the date on which a record is taken
for such Liquidating Dividend, or, if no record is taken, the date as of which
the record holders of Common Stock entitled to such dividends are to be
determined. Nothing in this paragraph 4 in any way shall permit any dividend,
distribution or other payment prohibited, restricted or limited by the Purchase
Agreement.
5. Purchase Rights. If at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the "Purchase Rights"), then each holder of the Notes shall be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such holder could have acquired if such holder
had held the number of shares of Conversion Stock acquirable upon conversion of
such holder's Note immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
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6. Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of the Notes may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Majority
Noteholders; provided that no such action shall change (i) the rate at which or
the manner in which interest accrues on the Notes or the times at which such
interest becomes payable, (ii) any provision relating to the scheduled payments
or prepayments of principal on the Notes or (iii) the Conversion Price of the
Notes or the number of shares or the class of stock into which the Notes are
convertible, without the written consent of all of the holders of the Notes.
7. Definitions. For purposes of the Notes, the following capitalized
terms have the following meanings:
"Common Stock" means, collectively the Company's Common Stock and any
capital stock of any class of the Company hereafter authorized which is not
limited to a fixed sum or percentage of par or stated value in respect to the
rights of the holders thereof to participate in dividends or in the distribution
of assets upon any liquidation, dissolution or winding up of the Company.
"Common Stock Deemed Outstanding" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to paragraphs 3(c)(i)
and 3(c)(ii) hereof, regardless of whether or not the Options and Convertible
Securities are actually exercisable at such time, but excluding any shares of
Common Stock issuable upon conversion of the Notes.
"Conversion Stock" means shares of the Company's authorized but
unissued Common Stock; provided that if there is a change such that the
securities issuable upon conversion of the Notes are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Conversion Stock" shall mean one share of the security issuable
upon conversion of this Note if such security is issuable in shares, or shall
mean the smallest unit in which such security is issuable if such security is
not issuable in shares.
"Market Price" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if on any day such security is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ System
as of 4:00 P.M., New York time, or, if on any day such security is not quoted in
the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which
"Market Price" is being determined and the 20 consecutive business days prior to
such day. If at any time such security is not listed on any securities exchange
or quoted in the NASDAQ System or the over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Company and the
Majority Noteholders. If such parties are unable to reach agreement within a
reasonable period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Majority Noteholders. The determination
of such appraiser shall be final and binding upon the parties, and the fees and
expenses of such appraiser shall be borne by the Company.
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"Prime Rate" means the interest rate per annum equal to the highest of
the prime, base or reference rates of interest announced publicly in the Wall
Street Journal or such other publication comparable in scope (whether or not
charged in such instance) by XX Xxxxxx Xxxxx (or any successor thereof) as such
bank's prime, base, or reference rate per annum as in effect on the last day of
each calendar quarter. If XX Xxxxxx Chase discontinues the practice of
announcing or publishing a prime, base or reference rate during the term of this
Agreement, then the Majority Noteholders may, in their reasonable judgment,
designate a comparable bank and/or publicly announced rate to be thereafter used
as a basis for determining Prime Rate. The Company acknowledges that XX Xxxxxx
Xxxxx may extend credit at rates of interest less than its announced prime, base
or reference rate.
8. Cancellation. After all principal and accrued interest at any time
owed on this Note has been paid in full, this Note shall be surrendered to the
Company for cancellation and shall not be reissued.
9. Place of Payment. Payments of principal and interest are to be
delivered to the Shareholder Purchaser at the address listed with its name on
Annex 1 to the Purchase Agreement, or to such other address or to the attention
of such other person as specified by prior written notice to the Company.
10. Usury Laws. It is the intention of the Company and the holder of
this Note to conform strictly to all applicable usury laws now or hereafter in
force, and any interest payable under this Note shall be subject to reduction to
the amount not in excess of the maximum legal amount allowed under the
applicable usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. If the maturity of this Note is accelerated by
reason of an election by the holder hereof resulting from an Event of Default,
voluntary prepayment by the Company or otherwise, then earned interest may never
include more than the maximum amount permitted by law, computed from the date
hereof until payment, and any interest in excess of the maximum amount permitted
by law shall be canceled automatically and, if theretofore paid, shall at the
option of the holder hereof either be rebated to the Company or credited on the
principal amount of this Note, or if this Note has been paid, then the excess
shall be rebated to the Company. The aggregate of all interest (whether
designated as interest, service charges, points or otherwise) contracted for,
chargeable, or receivable under this Note shall under no circumstances exceed
the maximum legal rate upon the unpaid principal balance of this Note remaining
unpaid from time to time. If such interest does exceed the maximum legal rate,
it shall be deemed a mistake and such excess shall be canceled automatically
and, if theretofore paid, rebated to the Company or credited on the principal
amount of this Note, or if this Note has been repaid, then such excess shall be
rebated to the Company.
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IN WITNESS WHEREOF, the Company has executed and delivered this Note on
December 14, 2001.
XXXXXX BOAT & MOTORS, INC.
By:
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Its:
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