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EXHIBIT 4.1
GENESIS WORLDWIDE INC.
12% JUNIOR SUBORDINATED NOTE, AS RESTATED
$11,947,541.00 July 1, 2000
Genesis Worldwide Inc. (the "Company"), an Ohio corporation, promises
to pay to Three Cities Research, Inc., as Stockholders Representative under a
Stock Purchase Agreement (the "Agreement") dated May 13, 1999 between the
Company and the stockholders of Precision Industrial Corporation (the "Holder"),
at the times and in the respective amounts described below, the total principal
sum of $11,947,541.00. The Company also promises to pay interest on the unpaid
principal amount of this Note at the rate which is 9% per annum until December
31, 2001, which increases to 12.5% on January 1, 2002 and continues at that rate
until March 31, 2002 and increases by 50 basis points on April 1, 2002 and each
July 1, October 1, January 1, and April 1 after that until April 1, 2004, on and
after which the rate of interest payable under this Note will be 17% per annum.
Interest will be based on a year of 365/366 days. The interest payment due and
payable under this Note on each of September 30, 2000, December 31, 2000 and
March 31, 2001 shall not be paid in cash, but in lieu thereof, an amount equal
to such cash payment shall be paid by increasing the principal amount of this
Note by such amount effective on the respective dates that such interest
payments are due and payable; and the principal amount of this Note as so
increased shall bear interest and be payable at the Maturity Date, all as
provided in this Note. To the extent any interest payment (other than a payment
under Paragraph 4 below) is at a rate in excess of 14% per annum, the amount
above 14% per annum will be paid with a note containing the same terms as this
Note, dated the date of the interest payment, in a principal amount equal to the
amount by which the interest payment exceeds what it would have been at 14% per
annum.
1. The entire unpaid principal balance of the sum evidenced by this
Note will be due and payable on December 31, 2007 (the "Maturity Date"). If,
however, at any time or times prior to the Maturity Date, the Company completes
a public offering for cash of equity securities or of debt securities which are
subordinated to some or all of the Company's Senior Indebtedness described in
Paragraph 8, other than upon exercise of options granted to directors of the
Company or officers of the Company or its subsidiaries under a stock option plan
for directors or employees, simultaneously with the sale of the securities which
are the subject of that public offering, the Company will make a prepayment of
the principal sum evidenced by this note which is equal to at least 80% of the
proceeds of the public offering, net of underwriting discounts and commissions,
or which is equal to the entire unpaid balance of that principal sum if that is
less, and the Company will pay all accrued but unpaid interest on the principal
sum which is being prepaid.
2. Interest will be payable on March 31, June 30, September 30 and
December 31 of each year (each an "Interest Payment Date"), with the first
interest payment to be made on the first of those dates after interest begins to
accrue.
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3. Except as otherwise provided above with respect to the interest
payments due and payable on September 30, 2000, December 31, 2000, and March 31,
2001, each payment of principal or interest will be made to the Holder by
certified or bank cashier's check or wire transfer, at such address or to such
account as the Holder specifies to the Company in writing at least three
business days before the payment is to be made.
4. Any payment of principal or interest which is not made when it is
due will bear interest from the date it is due until it is paid at the rate
which is 200 basis points higher than the interest rate in effect on the day the
payment is due, or such lower rate as is the maximum rate permitted by law.
5. The Company may at any time prepay all or any portion of the
outstanding balance of the principal sum evidenced by this Note (provided that
each prepayment must be at least $100,000, or such lesser amount as is the
entire outstanding balance of principal immediately before the prepayment). Each
prepayment will be applied against the payments of principal required by this
Note in the reverse of the order in which they are to be made. Each prepayment
of principal will be accompanied by all accrued but unpaid interest on the
principal sum being prepaid.
6. Each of the following events will constitute an Event of Default:
(a) The Company fails to make any payment of principal on or
before the day on which it is due; or
(b) The Company fails to make any payment of interest within
ten days after the day on which is it due; or
(c) The Company defaults in any of its obligations under
this Note other than obligations described in subparagraphs (a)
and (b) and fails to cure that default within 30 days after a
written demand from the Holder that the Company do so; or
(d) The Company or a significant subsidiary (as that term is
defined in Securities and Exchange Commission Regulation S-X)
commences a proceeding seeking relief as a debtor under the
Bankruptcy Code or any state or foreign insolvency law; or
(e) An order is entered in a proceeding under the Bankruptcy
Code or any state or foreign insolvency law declaring the Company
or a significant subsidiary to be insolvent or appointing a
receiver or similar official for substantially all the Company's
or a significant subsidiary's properties, and that order is not
dismissed within 90 days; or
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(f) Because of an event of default with regard to Senior
Indebtedness, a holder of Senior Indebtedness accelerates the
time when the principal of the Senior Indebtedness is due and
payable; or
(g) Because of events of default with regard to indebtedness
which is not Senior Indebtedness, holders of indebtedness
aggregating $500,000 which is not Senior Indebtedness accelerate
the time when that indebtedness is due and payable.
7. Upon the occurrence of an Event of Default, the Holder may, by a
notice to the Company given while the Event of Default is continuing, declare
the entire unpaid balance of the principal sum evidenced by this Note and the
accrued but unpaid interest to be due and payable, in which event that principal
balance and accrued but unpaid interest will be immediately due and payable,
except that if the Event of Default is of the type described in subparagraph (d)
or (e), the entire unpaid balance of the principal sum evidenced by this Note
and all accrued but unpaid interest will be immediately due and payable when the
Event of Default occurs, without requiring any notice or other action by the
Holder.
8. (a) The Company's obligations to make payments of principal and
interest under this Note are subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness. "Senior Indebtedness" means
all principal, premium, interest, and other sums due with regard to all
indebtedness for money borrowed (including the obligation to reimburse for
amounts drawn against letters of credit) from banks, insurance companies or
other financial institutions which the Company states, in the instrument
governing the indebtedness or a document delivered to the holder of the
indebtedness, to be Senior Indebtedness with regard to this Note, except that no
indebtedness (and no obligations with regard to the indebtedness) will be Senior
Indebtedness to the extent that incurrence of the indebtedness would cause the
entire Senior Indebtedness at the time the indebtedness is incurred to exceed
$100,000,000, plus, as to Senior Indebtedness which when it was incurred did not
cause the entire Senior Indebtedness to exceed that amount, additional advances
totaling not more than 10% of the maximum committed amount of that Senior
Indebtedness made by the lender to protect the Senior Indebtedness already held
by the lender. In furtherance and not in limitation of the foregoing, but
subject to the foregoing limitation on amount, "Senior Indebtedness" includes
all principal, interest and other obligations of the Company under a Credit
Agreement dated as of June 30, 1999 among the Company, the lenders party
thereto, and ING (U.S.) Capital LLC as administrative agent, as amended,
supplemented and otherwise modified from time to time.
(b) No payment of principal or interest on this Note will be
made (i) unless all amounts then due for principal, premium, if any, and
interest on Senior Indebtedness have been paid in cash or provided for, or (ii)
during the period (a "Blockage Period") between the time the Company is notified
by a holder of Senior Indebtedness that an event of default with respect to that
Senior Indebtedness exists which permits the holder of that Senior Indebtedness
to accelerate its maturity (a "Blockage Event") and the earlier of (x) the time
that event of default is cured or waived
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or ceases to exist, and (y) 180 days after the holder of that Senior
Indebtedness became entitled to accelerate its maturity, unless the holder of
that Senior Indebtedness has accelerated its maturity.
(c) During a Blockage Period, the Holder of this Note shall not
ask for, xxx for, take, demand or set off or in any other manner, direct or
indirect, attempt to enforce any right or collect any payment or distribution on
account of this Note, nor present this Note for payment.
(d) Upon any distribution of assets of the Company as a result
of any dissolution, winding up, liquidation or reorganization (whether in a
bankruptcy or insolvency proceeding or otherwise) (an "Insolvency Event"), (i)
all Senior Indebtedness must be paid in full in cash, or provision made for its
payment, before any payment is made on account of principal or interest on this
Note, (ii) any payment or distribution of assets of the Company to which the
Holder would be entitled except for this Paragraph must be paid or delivered by
the Company or by any trustee in bankruptcy, receiver, assignee for the benefit
of creditors or other liquidating agent, directly to the holders of the Senior
Indebtedness, pro rata to the amounts of Senior Indebtedness held by each of
them (or in accordance with any subordination agreements or other agreements
among them), to the extent necessary to pay all Senior Indebtedness in full
after giving effect to any concurrent payments or distributions to the holders
of the Senior Indebtedness or provision for payment or distribution to them, and
(iii) if, notwithstanding the foregoing, the Holder receives any payment or
distribution of property of the Company before all Senior Indebtedness is paid
in full, or provision made for its payment, the Holder will receive the cash or
property paid or distributed to the Holder in trust for the holders of the
Senior Indebtedness, and, upon a request made to the Holder by a holder of
Senior Indebtedness within one year after the cash or property is paid or
distributed to the Holder, the Holder will pay or deliver that cash or property
to the holders of the Senior Indebtedness, for application to the payment of any
Senior Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution to the holders of the Senior Indebtedness or provision
for payment or distribution to them. If no claim is made by holders of Senior
Indebtedness to cash or property paid or distributed to the Holder within one
year after the payment or distribution to the Holder, after the end of the one
year period, the Holder will hold the cash or property free of any trust.
(e) Following the occurrence and during the continuation of any
Insolvency Event:
i. the Holder of this Note shall take such action, duly
and promptly, as any holder of Senior Indebtedness may
request from time to time (A) to collect this Note for the
account of the holders of Senior indebtedness and (B) to
file appropriate proofs of claim in respect of this Note;
ii. the Holder of this Note irrevocably authorizes and
empowers each holder of Senior Indebtedness (A) to demand,
xxx for, collect and
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receive every payment or distribution on account of this
Note payable or deliverable in connection with such event or
proceeding and give acquittance therefor, and (B) to file
claims and proofs of claim in any statutory or non-statutory
proceeding and take such other actions, in its own name, or
in the name of the Holder of this Note or otherwise, as such
holders of Senior Indebtedness may deem necessary or
advisable for the enforcement of the provisions of this
Note; PROVIDED, HOWEVER, that the foregoing authorization
and empowerment imposes no obligation on the holders of
Senior Indebtedness to take any such action; and
iii. the Holder of this Note shall execute and deliver
such powers of attorney, assignments or proofs of claim or
other instruments as any holder of Senior Indebtedness may
reasonably request to enable such holder of Senior
Indebtedness to enforce any and all claims in respect of
this Note and to collect and receive any and all payments
and distributions which may be payable or deliverable at any
time upon or in respect of this Note; PROVIDED, that the
holders of Senior Indebtedness shall not exercise the rights
granted under this paragraph unless the Holder of this Note
has failed to take the necessary actions referenced above on
or prior to the date which is 15 days prior to the last date
on which such actions may be taken in accordance with
applicable law.
(f) The Holder of this Note consents that, without the
necessity of any reservation of rights against the Holder of this Note, and
without notice to or further assent by the Holder of this Note:
i. any demand for payment of any Senior Indebtedness
made by any holder of Senior Indebtedness may be rescinded
in whole or in part by such holder of Senior Indebtedness,
and any obligations under the Senior Indebtedness may be
continued, and the Senior Indebtedness, or the liability of
the Company or any guarantor or any other party upon or for
any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, or any
obligation or liability of the Company or any other party
under the Senior Indebtedness or any other agreement, may,
from time to time, in whole or in part, be renewed,
extended, modified, accelerated, compromised, waived,
surrendered, or released by any holder of Senior
Indebtedness; and
ii. the agreements relating to the Senior Indebtedness
may be amended, modified, supplemented or terminated, in
whole or in part, as any holder of Senior Indebtedness may
deem advisable from time to time, and any collateral
security at any time held by any holder of Senior
Indebtedness
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for the payment of any of the Senior Indebtedness may be
sold, exchanged, waived, surrendered or released, in each
case all without notice to or further assent by the Holder
of this Note, which will remain bound under this Section 8,
and all without impairing, abridging, releasing or affecting
the subordination provided for herein.
(g) Subject to the payment in full of all Senior Indebtedness,
the Holder will be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of property of the Company
made with regard to the Senior Indebtedness until the principal and interest
with regard to this Note is paid in full. For the purpose of that subrogation,
no payment or distribution to the holders of Senior Indebtedness, which, except
for the provisions of this Paragraph 8, would be payable or distributable to the
Holder, will, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holder, be deemed to be a payment by the Company with
regard to the Senior Indebtedness, it being understood that the provisions of
this Paragraph 8, other than subparagraph (c), are intended solely for the
purpose of defining the relative rights of the Holder, on the one hand, and the
holders of the Senior Indebtedness, on the other.
(h) Nothing in this Paragraph 8 is intended to impair, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holder, the obligation of the Company, which is absolute
and unconditional, to pay the principal and interest on this Note when they
become due. Nothing in this Paragraph 8 prevents the Holder from exercising all
remedies otherwise permitted by law upon default under this Note, subject to the
rights of holders of Senior Indebtedness under this Paragraph 8.
(i) Any person who becomes the Holder of this Note, or an
interest in it, will be deemed to have agreed by acquiring this Note, or the
interest in it, to be bound by the provisions of this Paragraph 8.
9. No amendment of this Note, waiver of any provision of this Note, or
extension of the time by which the Company must make any payment of principal or
interest on this Note, will be effective unless it is made in writing by the
Holder. Any waiver or extension will be effective only in the instance and for
the purpose for which it is given.
10. The remedies provided in this Note are cumulative and are not
exclusive of any other remedies provided by law. The Company will pay on demand
any expenses (including reasonable attorneys fees and expenses) incurred by the
Holder in enforcing its rights under this Note.
11. Any notices or other communications required or permitted to be
given under this Note must be in writing and will be deemed given on the day
when delivered in person or sent by facsimile (with proof of receipt at the
number to which it is required to be sent), or on the third business day after
the day on which it is mailed by first class mail from within the United States
of America, addressed (i) if to the Company, to the Company's principal
executive offices and to the
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principal facsimile number at those executive offices,
Attention: President, or at such other address or facsimile
number as the Company may specify to the Holder in writing,
and (ii) if to the Holder, at the address or facsimile
number specified by the Holder to the Company in writing.
12. This Note will be binding upon Company and its assigns, and will
inure to the benefit of the Holder and the Holder's assigns. This Note will be
governed by, and construed under, the laws of the State of New York.
IN WITNESS WHEREOF, the Company is executing this Note as of the date
shown on the first page.
GENESIS WORLDWIDE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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President and Chief Executive Officer
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