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EXHIBIT 99.14
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS EITHER REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THE CERPLEX GROUP, INC.
10% Subordinated Note
Due June 30, 1998
Registered Tustin, California
R-001 January 30, 1998
$2,000,000
THE CERPLEX GROUP, INC., a Delaware corporation (hereinafter
called the "Company"), for value received, hereby promises to pay to AURORA
ELECTRONICS, INC., a Delaware corporation, or its registered assigns, the
principal sum of TWO MILLION DOLLARS ($2,000,000) on June 30, 1998 (the
"Maturity Date"), and to pay interest (computed on the basis of a 360-day year
consisting of twelve 30-day months) from the date hereof on the unpaid stated
principal sum hereof at the rate of 10% per annum, payable on the Maturity
Date, and thereafter at the rate of 12% per annum on any overdue principal
amount and (to the extent permitted by applicable law) on any overdue interest
until paid.
All payments of principal and interest on this Note shall be
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for payment of public and private debts, and
shall be made at the offices of the person deemed the holder hereof in
accordance with Section 4 below.
For purposes of this Note, "Business Day" shall mean any day
other than a Saturday, Sunday or a legal holiday under the laws of the State of
New York.
1. NOTES. This Note is issued pursuant to a Note
Purchase Agreement, dated as of January 30, 1998 (the "Note Purchase
Agreement"), between the Company and Aurora Electronics, Inc. As used herein,
the term "Note" or "Notes" includes the 10% Subordinated Note of the Company
originally so issued and any 10% Subordinated Note or Notes subsequently issued
upon exchange or transfer thereof.
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2. TRANSFER, ETC. OF NOTE. The Company shall keep at
its office or agency maintained as provided in Section 8(a) a register in which
the Company shall provide for the registration of this Note and for the
registration of transfer and exchange of this Note. The holder of this Note
may, at its option, and either in person or by duly authorized attorney,
surrender the same for registration of transfer or exchange at the office or
agency of the Company maintained as provided in Section 8(a), and, without
expense to such holder (except for taxes or governmental charges imposed in
connection therewith), receive in exchange therefor a Note or Notes each in
such denomination or denominations as the holder hereof may request, dated as
of the date to which interest has been paid on this Note so surrendered for
transfer or exchange, for the same aggregate principal sum as the then unpaid
principal sum of this Note so surrendered for transfer or exchange, and
registered in the name of such person or persons as may be designated by the
holder hereof. This Note, when presented or surrendered for registration of
transfer or exchange, shall be duly endorsed, or shall be accompanied by a
written instrument of transfer, satisfactory in form to the Company, duly
executed by the holder of this Note or his attorney duly authorized in writing.
Every Note so made and delivered in exchange for this Note shall in all other
respects be in the same form and have the same terms as this Note. No transfer
or exchange of this Note shall be valid unless made in the foregoing manner at
such office or agency.
3. LOSS, THEFT, DESTRUCTION OR MUTILATION OF NOTE. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and, in the case of any such loss, theft or
destruction, upon receipt of an affidavit of loss and indemnity from the holder
hereof reasonably satisfactory to the Company, or, in the case of any such
mutilation, upon surrender and cancellation of this Note, the Company will make
and deliver, in lieu of this Note, a new Note of like tenor and unpaid
principal amount and dated as of the date to which interest has been paid on
this Note.
4. PERSON DEEMED OWNER; HOLDER. The Company may deem
and treat the person in whose name this Note is registered as the owner and
holder of this Note for the purpose of receiving payment of principal of and
interest on this Note and for all other purposes whatsoever, whether or not
this Note shall be overdue.
5. OPTIONAL PREPAYMENTS. The Company may, at its
option, prepay all or any portion of this Note, at the principal amount hereof
so to be prepaid, together with interest accrued thereon to the date of such
prepayment.
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6. NOTICES. All notices to be given to the holder of
this Note by the Company shall be given by registered or certified mail to the
person in whose name this Note is registered at its address designated on the
register maintained by the Company on the date of mailing such notice.
7. SURRENDER OF NOTE; NOTATION THEREON. Upon any
prepayment of a portion of the principal amount of this Note, the holder
hereof, at its option, may require the Company to execute and deliver at the
expense of the Company (except for taxes or governmental charges imposed in
connection therewith), upon surrender of this Note, a new Note registered in
the name of such person or persons as may be designated by such holder for the
principal amount of this Note then remaining unpaid, dated as of the date to
which interest has been paid on the principal amount of this Note then
remaining unpaid, or may present this Note to the Company for notation hereon
of the payment of the portion of the principal amount of this Note so prepaid.
8. COVENANTS. The Company covenants and agrees that, so
long as this Note shall be outstanding:
(a) Maintenance of Office. The Company will maintain an
office or agency in such place in the United States of America as the
Company may designate in writing to the registered holder hereof,
where this Note may be presented for registration of transfer and
exchange as herein provided, where notices and demands to or upon the
Company in respect of this Note may be served and where, at the option
of the holder hereof, this Note may be presented for payment. Until
the Company otherwise notifies the holder of this Note, said office
shall be the principal office of the Company at 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx 00000.
(b) Corporate Existence. The Company will do or cause to
be done all things necessary and lawful to preserve and keep in full
force and effect its corporate existence, rights and franchises and
the corporate existence, rights and franchises of each of its
subsidiaries; provided, however, that nothing in this paragraph (b)
shall prevent the abandonment or termination of any rights or
franchises of the Company, or the liquidation or dissolution of, or a
sale, transfer or disposition (whether through merger, consolidation,
sale or otherwise) of all or any substantial part of the property and
assets of, any subsidiary or the abandonment or termination of the
corporate existence, rights and franchises of any subsidiary if such
abandonment, termination, liquidation, dissolution, sale, transfer or
disposition is, in the good faith business judgment of the Company, in
the best interests of the Company and is not disadvantageous in any
material respect to the holder of this Note.
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(c) Notice of Default. If any one or more events which
constitute, or which with notice or lapse of time or both would
constitute, an Event of Default under Section 10 of this Note shall
occur, the Company shall, immediately after it becomes aware that any
such event has occurred, give notice to the holder of this Note,
specifying the nature of such event.
9. AMENDMENTS, MODIFICATIONS AND WAIVERS. This Note may
not be amended or modified nor any provision hereof waived except in a writing
signed by the Company and the holder of this Note.
10. EVENTS OF DEFAULT. If any one or more of the
following events, herein called Events of Default, shall occur, for any reason
whatsoever, and whether such occurrence shall, on the part of the Company or
any subsidiary, be voluntary or involuntary, or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of a court of competent jurisdiction or any order, rule or regulation of
any administrative or other governmental authority, and such Event of Default
shall be continuing:
(a) the Company shall not pay any principal of this Note
when and as the same shall become due and payable, whether at maturity
or at a date fixed for prepayment or by acceleration or otherwise; or
(b) the Company shall not pay all accrued interest on
this Note on the Maturity Date, or shall not pay any interest when due
in connection with any prepayment or repayment of principal of this
Note, and such non-payment shall continue for a period of 10 Business
Days; or
(c) the Company shall fail to duly perform or observe any
other covenant, condition or agreement to be observed or performed by
it pursuant to the terms hereof and such failure shall continue for 30
days after written notice from the holder hereof specifying such
failure and requesting that the same be remedied; or
(d) any representation or warranty made by the Company in
the Note Purchase Agreement shall prove to have been false or
incorrect on the date on or as of which made in any respect material
to the transactions contemplated by such Agreement; or
(e) the entry of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Company or any
subsidiary in an involuntary case under the federal bankruptcy laws,
as now constituted or hereafter
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amended, or any other applicable federal or state bankruptcy,
insolvency or other similar laws, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or any subsidiary or for any substantial part
of any of their property, or ordering the winding-up or liquidation of
any of their affairs and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(f) the commencement by the Company or any subsidiary of
a voluntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar laws, or the consent by any of
them to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or any subsidiary or for any
substantial part of their property, or the making by any of them of
any assignment for the benefit of creditors, or the failure of the
Company or any subsidiary generally to pay its debts as such debts
become due; or
(g) default as defined in any instrument evidencing or
under which the Company or any subsidiary has outstanding at the time
any indebtedness for money borrowed in excess of $2,000,000 in
aggregate principal amount shall occur and as a result thereof the
maturity of any such indebtedness shall have been accelerated so that
the same shall have become due and payable prior to the date on which
the same would otherwise have become due and payable and such
acceleration shall not have been rescinded or annulled within 30 days;
or
(h) final judgment for the payment of money in excess of
$200,000 shall be rendered against the Company or a subsidiary and the
same shall remain undischarged for a period of 60 days during which
execution shall not be effectively stayed;
then, the holder of this Note may, at its option, by notice to the Company,
declare this Note to be, and this Note shall thereupon be and become, forthwith
due and payable together with interest accrued hereon without presentment,
demand, protest or further notice of any kind, all of which are expressly
waived to the extent permitted by law.
At any time after any declaration of acceleration of this Note
has been made as provided in this Section 10, the holder of this Note may, by
notice to the Company, rescind such declaration and its consequences, if all
other defaults and Events of Default (other than nonpayments of principal and
interest that have become due solely by reason of acceleration) shall have been
remedied or cured or shall have been waived pursuant to this paragraph;
provided, however, that no such rescission shall extend to or affect any
subsequent default or Event of Default or impair any right consequent thereon.
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11. SUITS FOR ENFORCEMENT. In case any one or more of
the Events of Default specified in Section 10 of this Note shall occur and be
continuing, the holder of this Note may proceed to protect and enforce its
rights by suit in equity, action at law and/or by other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Note or in aid of the exercise of any power granted in this Note, or may
proceed to enforce the payment of this Note or to enforce any other legal or
equitable right of the holder of this Note.
In case of any default under this Note, the Company will pay
to the holder hereof such amounts as shall be sufficient to cover the
reasonable costs and expenses of the holder hereof due to said default,
including, without limitation, collection costs and reasonable attorneys' fees,
to the extent actually incurred.
12. REMEDIES CUMULATIVE. No remedy herein conferred upon
the holder of this Note is intended to be exclusive of any other remedy and
each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise.
13. REMEDIES NOT WAIVED. No course of dealing between
the Company and the holder of this Note or any delay on the part of the holder
hereof in exercising any rights hereunder shall operate as a waiver of any
right of any holder of this Note.
14. SUBORDINATION.
(a) Anything contained in this Note to the contrary
notwithstanding, the indebtedness evidenced by this Note and any obligations
arising in connection herewith shall be subordinate and junior, to the extent
set forth in this Section 14, to all Senior Indebtedness of the Company.
"Senior Indebtedness" shall mean the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all fees, reimbursements, indemnity obligations (including any fees,
reimbursements or indemnity obligations accruing subsequent to the filing of a
petition of bankruptcy, whether or not such fees, reimbursements or indemnity
obligations constitute an allowed claim under applicable law) and other
obligations arising in connection with, the Credit Agreement (as defined below)
and any other indebtedness for borrowed money of the Company, contingent or
otherwise, now outstanding or created, incurred, issued, assumed or guaranteed
in the future, other than indebtedness as to which the instrument creating or
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evidencing the same or pursuant to which the same is outstanding expressly
provides that such indebtedness is subordinate in right of payment to all other
indebtedness of the Company. For purposes of this Note, "Credit Agreement"
shall mean the Credit Agreement, dated as of October 12, 1994, as amended,
among the Company, the Lenders named therein and Citibank, N.A., as successor
to Xxxxx Fargo Bank, National Association, as Administrative Agent (the
"Agent"), together with any agreement entered into in connection with the
restatement, renewal, extension, restructuring, refunding or refinancing of the
Obligations.
(A) In the event of any insolvency, bankruptcy,
liquidation, reorganization, assignment for the benefit of creditors
or other similar proceedings, or any receivership proceedings in
connection therewith, relative to the Company or its creditors or its
property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Company, whether
or not involving insolvency or bankruptcy proceedings, then all Senior
Indebtedness shall first be paid in full in cash before any direct or
indirect payment or distribution, whether on account of principal,
interest or otherwise, is made upon this Note.
(B) In any of the proceedings referred to in paragraph
(A) above, any payment or distribution of any kind or character,
whether in cash, property, stock or obligations which may be payable
or deliverable in respect of this Note shall be paid or delivered
directly to the holder of Senior Indebtedness for application in
payment thereof, unless and until all Senior Indebtedness shall have
been paid in full in cash.
(C) No direct or indirect payments or distributions by or
on behalf of the Company on or with respect to this Note (whether
pursuant to the terms of this Note or upon acceleration or otherwise,
or the payment of principal of or interest on this Note) shall be made
until all Senior Indebtedness has been paid in full in cash and all
obligations to provide financial accommodations under the Credit
Agreement.
(b) Until and unless the Senior Indebtedness is indefeasibly
paid in full in cash, the holder of this Note shall not be subrogated to any
rights or claims of the holders of the Senior Indebtedness. Subject to the
indefeasible payment in full in cash of all Senior Indebtedness as aforesaid,
the holder of this Note shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of any kind or
character, whether in cash, property, stock or obligations, which may be
payable or deliverable to the holders of Senior Indebtedness, until the
principal of, and interest on, this Note shall be paid in full in cash, and, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holder of this Note, no such payment or distribution made
to the holders of Senior Indebtedness by virtue of
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this Section 14 which otherwise would have been made to the holder of this Note
shall be deemed a payment by the Company on account of the Senior Indebtedness,
it being understood that the provisions of this Section 14 are and are intended
solely for the purposes of defining the relative rights of the holder of this
Note, on the one hand, and the holders of Senior Indebtedness, on the other
hand. Subject to the rights, if any, under this Section 14 of holders of
Senior Indebtedness to receive cash, property, stock or obligations otherwise
payable or deliverable to the holder of this Note, nothing herein shall either
impair, as between the Company and the holder of this Note, the obligation of
the Company, which is unconditional and absolute, to pay to the holder of this
Note the principal hereof and interest hereon in accordance with the terms
hereof or prevent (except as otherwise specified therein) the holder of this
Note from exercising all remedies otherwise permitted by applicable law or
hereunder upon default hereunder.
(c) If any payment or distribution of any character, whether
in cash, property, stock or obligations, shall be received by the holder of
this Note in contravention of any of the terms hereof or before the Senior
Indebtedness has been indefeasibly paid in full in cash and all obligations to
provide financial accommodations under the Credit Agreement have terminated,
such payment or distribution shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full in cash. In the event of the failure of any such holder
to endorse or assign any such payment or distribution, each holder of any
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
name.
(d) The rights under these subordination provisions of the
holders of any Senior Indebtedness as against the holder of this Note shall
remain in full force and effect without regard to, and shall not be impaired or
affected by:
(i) any act or failure to act on the part of the Company;
or
(ii) any extension or indulgence in respect of any payment
or prepayment of any Senior Indebtedness or any part thereof or in
respect of any other amount payable to any holder of any Senior
Indebtedness; or
(iii) any amendment, modification or waiver of, or addition
or supplement to, or deletion from, or compromise, release, consent or
other action in respect of, any of the terms of any Senior
Indebtedness or any other agreement which may be made relating to any
Senior Indebtedness; or
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(iv) any exercise or non-exercise by the holder of any
Senior Indebtedness of any right, power, privilege or remedy under or
in respect of such Senior Indebtedness or these subordination
provisions or any waiver of any such right, power, privilege or remedy
or of any default in respect of such Senior Indebtedness or these
subordination provisions or any receipt by the holder of any Senior
Indebtedness of any security, or any failure by such holder to perfect
a security interest in, or any release by such holder of, any security
for the payment of such Senior Indebtedness; or
(v) any merger or consolidation of the Company or any of
its subsidiaries into or with any other person, or any sale, lease or
transfer of any or all of the assets of the Company or any of its
subsidiaries to any other person; or
(vi) absence of any notice to, or knowledge by, any holder
of any claim hereunder of the existence or occurrence of any of the
matters or events set forth in the foregoing clauses (i) through (v);
or
(vii) any other circumstance.
(e) The holder of this Note unconditionally waives (i)
notice of any of the matters referred to in Section 14(d), (ii) all notices
which may be required, whether by statute, rule of law or otherwise, to
preserve intact any rights of any holder of any Senior Indebtedness, including,
without limitation, any demand, presentment and protest, proof of notice of
nonpayment under any Senior Indebtedness or the Credit Agreement, and notice of
any failure on the part of the Company to perform and comply with any covenant,
agreement, term or condition of any Senior Indebtedness, (iii) any right to the
enforcement, assertion or exercise by any holder of any Senior Indebtedness of
any right, power, privilege or remedy conferred in such Senior Indebtedness or
otherwise, (iv) any requirements of diligence on the part of any holder of any
of the Senior Indebtedness, (v) any requirement on the part of any holder of
any Senior Indebtedness to mitigate damages resulting from any default under
such Senior Indebtedness, (vi) any marshalling by the holders of the Senior
Indebtedness and (vii) any notice of any sale, transfer or other disposition of
any Senior Indebtedness by any holder thereof.
(f) The obligations of the holder of this Note under
these subordination provisions shall continue to be effective, or be
reinstated, as the case may be, if at any time any payment in respect of any
Senior Indebtedness, or any other payment to any holder of any Senior
Indebtedness in its capacity as such, is rescinded or must otherwise be
restored or returned by the holder of such Senior Indebtedness upon the
occurrence of any proceeding referred to in paragraph (a)(A) hereof or upon or
as a result of the appoint of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any substantial
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part of its property or otherwise, all as though such payment had not been
made.
(g) Notwithstanding anything to the contrary herein, the
Company shall not at any time offer (and the holder hereof shall not at any
time accept) (i) any pledge of collateral or (ii) any guaranty by any parent or
subsidiary of the Company, in each case with respect to the obligations of the
Company under this Note.
(h) If payment of this Note is accelerated by the holder
hereof pursuant to Section 10 because of an Event of Default, then the Company
shall promptly notify the Agent under the Credit Agreement of such
acceleration.
15. COVENANTS BIND SUCCESSORS AND ASSIGNS. All the
covenants, stipulations, promises and agreements in this Note contained by or
on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
16. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. HEADINGS. The headings of the Sections and
paragraphs of this Note are inserted for convenience only and do not constitute
a part of this Note.
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IN WITNESS WHEREOF, THE CERPLEX GROUP, INC. has caused this
Note to be signed in its corporate name by one of its officers thereunto duly
authorized and to be dated as of the day and year first above written.
THE CERPLEX GROUP, INC.
By:
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Name:
Title:
