No. [__]
Amended and Restated
Senior Subordinated Note due 2005
This Note has not been registered under the Securities Act of 1933, as
amended, and may not be sold or otherwise transferred in the absence of
such registration or an exemption therefrom under such Act. This Note
may be sold or otherwise transferred only in compliance with the
conditions specified in the Subscription Agreement (as hereinafter
defined), a complete and correct copy of which is available for
inspection at the principal office of the Company (as hereinafter
defined) and will be furnished without charge to the holder of this
Note upon written request.
This Note is subject to the terms of a certain Stockholder Agreement,
dated as of January 30, 1995, among the issuer of this Note and certain
investors. The Stockholder Agreement contains certain restrictive
provisions relating to the transfer of this Note. A copy of the
Stockholder Agreement is on file at the Company's principal offices.
Upon written request to the Company's Secretary, a copy of the
Stockholder Agreement will be provided without charge to appropriately
interested persons.
$[______] October 16, 1997
CDI GROUP, INC., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to [_______], (the "Purchaser"), or its
registered assigns, on January 31, 2005 the entire principal amount of [_______]
DOLLARS ($[_______]), together with interest on the unpaid principal amount
outstanding from time to time hereunder (or under the Predecessor Note, as
defined below), beginning on January 30, 1995, at a rate equal to 10% per annum
compounded annually (computed on the basis of
ANNEX A
actual number of days elapsed and a 360-day year). The Company further promises
to pay on demand, interest at the rate of 18% per annum compounded monthly on
any overdue principal and, to the extent permitted by applicable law, any
overdue interest, until the obligation of the Company with respect to the
payment thereof shall be discharged.
All payments of principal and interest hereof shall be made in lawful
money of the United States of America to the account of the holder hereof upon
presentation hereof at the principal office of the Purchaser at
[_______________], or at such other place as the holder hereof shall have
designated to the Company in writing. All payments by the Company to the
Purchaser shall be made without setoff or counterclaim, and free and clear of
and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any country or any political
subdivision thereof or taxing or other authority unless the Company is compelled
by law to make such deduction or withholding.
This Note constitutes the amendment and restatement in its entirety of
one of the Note of the Company (the "Predecessor Note") in the original
principal amount of $[_______] issued pursuant to the Subscription Agreement,
dated as of January 30, 1995 (the "Subscription Agreement"), between the Company
and the Purchaser. Nothing herein or in any other document shall be construed to
constitute the payment or discharge of the Predecessor Note. The holder of this
Note is entitled to enforce the provisions of the Subscription Agreement and to
enjoy the benefits thereof and is subject to the obligations thereunder as a
holder of a Note.
Subject to the subordination provisions contained in Annex A hereto,
the Company may from time to time at its election prepay this Note, in whole or
in part, without premium or penalty, with all accrued interest to the date of
prepayment on the principal amount prepaid.
Any permitted transfer of this Note is registrable on the note register
of the Company upon presentation at the principal office of the Company
accompanied by a written instrument of transfer in form satisfactory to the
Company duly executed by, or on behalf of, the holder hereof. This Note may also
be exchanged at such office for one or more Notes in any authorized
denominations, as requested by the holder, of a like aggregate unpaid principal
amount.
Prior to due presentment for registration of transfer, the Company and
any agent of the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment of principal
and interest as herein provided and for all other purposes.
Subject to the subordination provisions contained in Annex A hereto,
the Company shall pay on demand all collection costs and expenses, including
reasonable legal fees and disbursements, incurred by the holder of this Note in
enforcing payment hereof.
ANNEX A
The holder of this Note, by acceptance hereof, agrees with the Company
that this Note shall be subordinate and junior in right of payment to all Senior
Indebtedness (as defined in Annex A hereto) to the extent and in the manner
provided in Annex A attached hereto and agrees to be bound by the other terms
and conditions set forth therein.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts and for all purposes shall be
construed in accordance with such laws.
CDI GROUP, INC.
By: ___________________________________
Title: ________________________________
ANNEX A
TO PROMISSORY NOTE
SUBORDINATION PROVISIONS
Section 1.01. Subordination of Liabilities. CDI Group, Inc. (the
"Company"), for itself, its successors and assigns, covenants and agrees and
each holder of the promissory note to which this Annex A is attached (the
"Note") by its acceptance thereof likewise covenants and agrees that the payment
of the principal of. and interest on, and all other amounts owing in respect of.
the Note is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, to the prior payment in full of Senior Indebtedness (as
defined in Section 1.07) in cash. The provisions of this Annex A shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder the same as if their names
were written herein as such, and they and/or each of them may proceed to enforce
such provisions.
Section 1.02. Company Not to Make Payments with Respect to
Notes in Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity, by acceleration or otherwise, all
principal thereof and premium. if any, and interest thereon or fees or any other
amounts owing in respect thereof, in each case to the extent due and owing,
shall first be paid in full in cash, or such payment duly provided for in cash
or in a manner satisfactory to the holder or holders of such Senior
Indebtedness, before any payment is made on account of the principal of
(including installments thereof), or interest on, or any amount otherwise owing
in respect of, the Note.
(b) So long as an Event of Default (as defined below), or
event which with notice or lapse of time or both would constitute an Event of
Default (a "Default"), in respect of any Senior Indebtedness exists (i) all
Senior Indebtedness shall first be finally and indefeasibly paid in full in
cash, or payment shall have been provided for in a manner satisfactory to the
holders of such Senior Indebtedness, before any payment is made with respect to
the Note and (ii) no holder of the Note will take any action (including, without
limitation, the filing of any bankruptcy or similar petition) to obtain any such
payment or to ask, demand, sue for, or otherwise take, accept or receive, any
amounts owing in respect of the Note or to otherwise enforce the provisions of
the Note. As used herein, the term "Event of Default" shall mean any Event of
Default under and as defined in, the relevant documentation governing any Senior
Indebtedness.
(c) Each holder of the Note agrees that it will not at any
time insist upon, plead, or in any manner whatsoever seek the entry of any order
or judgment, or take the benefit or advantage of any substantive consolidation,
piercing of the corporate veil or any other order or judgment that causes an
effective combination of the assets and liabilities of the Company and any other
individual, corporation, partnership or joint venture (including without
limitation, any Subsidiary (as defined in Section 1.07) of the Company) in any
case or proceeding under Title 11 of the United States Code or under any other
similar federal, state or foreign proceeding.
(d) In the event that notwithstanding the provisions of this
Section 1.02, the Company shall make any payment on account of the principal of,
or interest on, or amounts otherwise owing in respect of, the Note, at a time
when payment is not permitted by the provisions of this Annex A, such payment
shall be held by the holder of the Note, in trust for the benefit of, and shall
be paid forthwith over and delivered to, the holders of Senior Indebtedness or
their representative or representatives under the agreements pursuant to which
the Senior Indebtedness may have been issued, as their respective interests
may appear, for application pro rata to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in cash in accordance with the terms of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Indebtedness. Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if such notice is not given, the
Company shall give the holder of the Note prompt written notice of any maturity
of Senior Indebtedness after which such Senior Indebtedness remains unsatisfied
and of any Event of Default or Default.
Section 1.03. Note Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. In the
event of any execution, sale, receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization, or other similar proceeding relative to the
Company or its property, or upon any distribution of assets in connection with
any of the foregoing (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be paid
in full in cash or in a manner satisfactory to the holder or holders of such
Senior Indebtedness before the holder of the Note is entitled to receive any
payment on account of the principal of or interest on or any other amount owing
in respect of the Note;
(b) any payment or distributions of assets of the Company of
any kind or character, whether in cash, property or securities to which the
holder of the Note would be entitled except for the provisions of this Annex A,
shall be paid by the liquidating trustee or agent or other person making such
payment or distribution. whether a trustee or agent, directly to the holders of
Senior Indebtedness or their representative or representatives under the
agreements pursuant to which the Senior Indebtedness may have been issued, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, shall
be received by the holder of the Note on account of principal of, or interest or
other amounts due on, the Note before all Senior Indebtedness is paid in full in
cash or in a manner satisfactory to the holder or holders of such Senior
Indebtedness, such payment or distribution shall be received and held in trust
for and shall be paid over to the holders of the Senior Indebtedness remaining
unpaid or unprovided for or their representative or representatives under the
agreements pursuant to which the Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full in cash or in a manner satisfactory to
the holder or holders of such Senior Indebtedness, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, if such notice is not given, the
Company shall give prompt written notice to the holder of the Note of any of the
events described in the first clause of Section 1.03.
Section 1.04. Subrogation. (a) Upon the final and indefeasible
payment in full of all Senior Indebtedness in cash, the holder of the Note shall
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation, and as between the Company and its creditors
(other than the holders of Senior Indebtedness) and the holders of the Notes, no
payments or distributions to the holders of the Senior Indebtedness by or on
behalf of the Company or by or on behalf of the holder of the Note by virtue of
this Annex A which otherwise would have been made to the holder of the Note,
shall be deemed to be payment by the Company to or on account of the Senior
Indebtedness. The provisions of this Annex A are and are intended solely for
the purpose of defining the relative rights of the holder of the Note, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
(b) Each holder of the Note by its acceptance thereof
undertakes and agrees for the benefit of each holder of Senior Indebtedness to
execute, verify, deliver and file any proofs of claim which any holder of Senior
Indebtedness may at any time require in order to prove and realize upon any
right or claims pertaining to the Note and to effectuate the full benefit of the
subordination contained herein; and upon failure of the holder of the Note so to
do, any such holder of Senior Indebtedness shall be deemed to be irrevocably
appointed the agent and attorney-in-fact of the holder of the Note to execute,
verify, deliver and file any such proofs of claim.
(c) To the extent that any holder of Senior Indebtedness
receives payments on, or proceeds of collateral for, Senior Indebtedness which
are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law, or equitable cause,
then, to the extent of such payment or proceeds received, Senior Indebtedness,
or part thereof intended to be satisfied, shall be revived and continue in full
force and effect as if such payments or proceeds had not been received by such
holder of Senior Indebtedness.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between the Company and the holder of the Note, the obligation of the Company,
which is absolute and unconditional, to pay to the holder of the Note the
principal of and interest on the Note as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holder of the Note and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the holder of the Note from exercising all remedies otherwise
permitted by applicable law, subject to the rights, under this Annex A of the
holders of Senior Indebtedness.
Section 1.06. Subordination Rights not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by an act or
failure to act on the part of the Company or by any act or failure to act in
good faith by any such holder, or by any noncompliance by the Company with the
terms and provisions of the Note, regardless of any knowledge thereof which any
such holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect thereto, at any time or from time to time and in their
absolute discretion, change the manner, rate or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness, or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of a default thereunder
and the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness. (a) The term "Senior
Indebtedness" shall mean all Obligations (as defined below) of the Company under
the Indenture (as defined below).
(b) As used in this Agreement, the terms set forth below shall
have the respective meanings provided below:
"Indenture" shall mean the Indenture, dated October 16, 1997,
between the Company and Community Distributors, Inc. and The Bank of New York as
trustee relating to the Senior Notes due 2004 of Community Distributors, Inc.
"Obligations" shall mean any principal, interest, premium,
penalties, fees and other liabilities and obligations payable under the
documentation governing any Senior Indebtedness (including, without limitation,
all interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided in the governing
documentation, whether or not such interest is an allowed claim in such
proceeding).
