EXHIBIT 10.(5)
NOTE
$36,000,000.00 St. Petersburg, Florida
December 16, 1996
FOR VALUE RECEIVED, the undersigned, ECHELON INTERNATIONAL
CORPORATION, a Florida corporation (the "Borrower"), hereby unconditionally
promises to pay on December 16, 2000 (the "Maturity Date") to the order of
PROGRESS CAPITAL HOLDINGS, INC., a Florida corporation (the "Lender"), in lawful
money of the United States of America and in immediately available funds, the
principal amount of THIRTY-SIX MILLION AND 00/100 DOLLARS ($36,000,000.00).
The Borrower may, at any time and from time to time, prepay
this Note, in whole or in part, without premium or penalty, upon at least four
business days' irrevocable notice to the Lender, specifying the date and amount
of prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
and unpaid interest to such date on the amount prepaid.
The Borrower agrees that immediately upon the sale or other
transfer or disposition of any asset listed on Schedule 1 or Schedule 2 attached
hereto and the receipt of the proceeds therefrom by the Borrower, the Borrower
shall make a mandatory prepayment of the principal amount of this Note. The
amount of such prepayment which the Borrower is required to pay the Lender
pursuant to this paragraph upon such sale or other transfer or disposition shall
be the lesser of (a) the then outstanding principal amount of this Note or (b):
(i) where the sale or other transfer or disposition of any
asset listed on Schedule 1 or Schedule 2 attached hereto results in a
taxable gain to the Borrower, the cash received by the Borrower from
such sale, other transfer or disposition (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received), net of attorneys' fees,
accountants' fees, brokers' or finders' fees, and other customary fees
and expenses actually incurred in connection therewith, and less the
amount of the Borrower's taxes due with respect to such sale, transfer,
or disposition; and
(ii) where the sale or other transfer or disposition of any
asset listed on Schedule 1 or Schedule 2 attached hereto results in a
taxable loss to the Borrower, the cash received by the Borrower from
such sale, other transfer or disposition (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received), net of attorneys' fees,
accountants' fees, brokers' or finders' fees, and other customary fees
and expenses actually incurred in connection therewith, plus the amount
of the tax benefit realized by the Borrower from the aforementioned tax
loss (for purposes of this Note, the amount and timing of any such tax
benefit shall be determined in accordance with the principles set forth
in the Tax Sharing Agreement by and between the Borrower and Florida
Progress Corporation dated as of December 16, 1996).
In addition, within 10 days of the date hereof, the Borrower
shall make a prepayment of the principal amount of this Note to the Lender equal
to $3,135,000.00.
So long as any principal amount remains outstanding under this
Note, the Borrower shall, within 30 days following the end of each fiscal
quarter of the Borrower, provide Lender with a certificate of the chief
executive officer of Xxxxxxxx describing in reasonable detail any third party
proposals to purchase any of the assets described on Schedule 1 hereto and the
identity of any proposed third party purchasers.
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The Borrower also agrees that immediately upon the occurrence
of a Change in Control, the Borrower shall be required to prepay this Note at a
price equal to 100% of the then outstanding principal amount, together with
accrued and unpaid interest, if any, to the date of prepayment. A Change in
Control shall be deemed to have occurred if (a) any person or "group" (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) (i) shall have acquired beneficial ownership of 20% or more of any
outstanding class of capital stock having ordinary voting power in the election
of directors of the Borrower or (ii) shall obtain the power (whether or not
exercised) to elect a majority of the Borrower's directors, (b) the Board of
Directors of the Borrower shall not consist of a majority of Continuing
Directors or (c) a "Change of Control" (however denominated) under any other
indebtedness of the Borrower shall occur. For purposes of this provision,
"Continuing Directors" shall mean the directors of the Borrower on the date
hereof and each other director, if such other director's nomination for election
to the Board of Directors of the Borrower is recommended by a majority of the
then Continuing Directors.
The Borrower further agrees to pay interest in like money on
the unpaid principal amount hereof from time to time outstanding until paid in
full (both before and after judgment). Such interest shall be payable
semi-annually in arrears, and shall be compounded monthly and calculated on the
basis of a 360-day year for actual days elapsed. This Note shall bear interest
for each day during an Interest Period at a rate per annum equal to the LIBOR
Rate determined for such day plus (a) 2.95% until maturity (whether as stated,
by acceleration or otherwise), and (b) 4.95% after maturity.
"LIBOR Rate" means, with respect to each day during each
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, at approximately 11:00 a.m.,
London time, two Business Days (as defined below) prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period.
"Interest Period" means, (a) initially, the period commencing
on the date hereof and ending one month thereafter, and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period and
ending one month thereafter; provided that, if any Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day.
If any payment on this Note becomes due and payable on a
Saturday, Sunday or other day on which commercial banks in the State of Florida
are authorized or required by law to close, the maturity thereof shall be
extended to the next succeeding day which is not a Saturday, Sunday or other day
on which commercial banks in the State of Florida are authorized or required by
law to close (a "Business Day") and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
As soon as practicable after the Lender shall, at any time or
from time to time, request that the Borrower do so, the Borrower shall exercise
its best efforts to take, and to cause the trustee of each trust which owns any
aircraft and/or engines relating to or underlying the assets described in
Schedule 1 hereto to take, such actions as the Lender shall have reasonably
requested (x) to provide the Lender with valid first perfected security
interests in those assets set forth on Schedule 1 hereto, including the related
aircraft and engines and any and all contract rights and related interests of
the Borrower arising out of or relating to such assets, and (y) to obtain such
consents, waivers and/or authorizations from third parties as may be necessary
to permit such security interests to be granted.
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The certain mortgages and other security agreements to be entered into are
hereinafter collectively referred to as the "Mortgages".
The Borrower will not create, incur, assume or permit to exist
any lien, security interest, claim or other encumbrance (collectively, "Liens")
on any of the property (tangible or intangible) described in Schedule 1 hereto,
except (i) in the case of the property described as the "Owned Real Estate",
Liens permitted by the Mortgages covering such real estate and (ii) in the case
of all other such property, Liens permitted under the various documents
described on Schedule 1 and Liens permitted by the Mortgages.
If any of the following events (herein called "Events of
Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any interest hereon, or any
other amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(c) (i) for any reason any Mortgage entered into on or after
the date hereof ceases to be or is not in full force and effect (except
in accordance with its terms) in any material respect and such default
shall continue unremedied for 30 days after the earlier of receipt by
the Borrower of notice of such default from the Lender or actual
knowledge of such default by a senior officer of the Borrower, (ii) the
Borrower shall assert in writing that any such Mortgage has ceased to
be or is not in full force and effect (except in accordance with its
terms) or (iii) the lien created by such Mortgage shall cease to be
enforceable and of the same effect and priority purported to be created
thereby (except as a result of the sale or other transfer or
disposition of any asset listed on Schedule 1 hereto the proceeds of
which are applied in accordance with the third paragraph of this Note);
or
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(d) any representation or warranty made or deemed made by the
Borrower herein or in any Mortgage or which is contained in any
certificate furnished by it at any time under or in connection with
this Note shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(e) the Borrower shall default in the observance or
performance of any other agreement contained in this Note or any
Mortgage (other than as provided in sub-paragraphs (a) or (d) of this
paragraph), and such default shall continue unremedied for a period of
30 days after the Chief Executive Officer, the Chief Financial Officer
or Controller of the Borrower has knowledge of such default or after
notice from the Lender; or
(f) the Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on any indebtedness beyond
the period of grace, if any, provided in the instrument or agreement
under which such indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating
to any such indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, such
indebtedness to become due prior to its stated maturity;
then, and in any such event, (A) in the case of any event specified in clause
(i) or (ii) of sub-paragraph (b) above, automatically all principal owing
hereunder (with accrued interest thereon) and all other amounts owing under this
Note shall immediately become due and payable, and (B) in the case of any other
event specified in sub-paragraphs (a) through (f) above, the Lender may, by
notice to the Borrower, declare the principal amount owing hereunder (with
accrued interest thereon) and all other amounts owing under this Note to be due
and payable forthwith, whereupon the same shall immediately become due and
payable.
The Borrower hereby represents and warrants to the Lender that
this Note has been duly authorized, executed and delivered by the Borrower and
constitutes the legal, valid and binding obligation of the Borrower, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
The Borrower hereby waives the requirements of demand,
presentment, protest and notice of dishonor and all other demands or notices of
any kind in connection with the delivery, acceptance, performance, default,
dishonor or enforcement of this Note.
Any provision of this Note which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
No failure to exercise and no delay in exercising, on the part
of the Lender, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers
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and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
For so long as this Note or any obligation hereunder remains
outstanding, the Borrower hereby irrevocably waives and agrees not to assert all
rights of set-off, counterclaim or defense to payment, whether now existing or
hereafter arising, that the Borrower may have against the Lender.
Neither this Note, nor any terms hereof, may be amended,
supplemented or modified except by written amendment executed by the Borrower.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Note, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of Florida, the courts of the
United States of America for the Middle District of Florida, and
appellate courts from any thereof;
(b) to the extent permitted by applicable law, consents that
any such action or proceeding may be brought in such courts and waives
any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead
or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at Echelon International Corporation, Xxx
Xxxxxxxx Xxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, Attention:
President, or at such other address provided to the Lender by the
Borrower;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this paragraph any special, exemplary, punitive or
consequential damages.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA.
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS NOTE AND FOR ANY COUNTERCLAIM THEREIN.
ECHELON INTERNATIONAL CORPORATION
By:/s/Xxxxx X. Xxxxxxx
Name:Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
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CORPORATE ACKNOWLEDGMENT
STATE OF Georgia )
)
COUNTY OF Lowndes )
The foregoing instrument was acknowledged before me this 16th
day of December, 1996 by Xxxxx Xxxxxxx, as Senior Vice President of ECHELON
INTERNATIONAL CORPORATION, a Florida corporation, on behalf of the corporation.
He either [please check as applicable] is personally known to me, or has
presented as identification.
/s/Xxxxx X. Xxxxxxx
Notary Public
Name: Xxxxx X. Xxxxxxx
My Commission Expires:
Commission No:
(NOTARY STAMP)
Florida Documentary Stamp Taxes in the amount of $_______ have been paid and
the stamps have been affixed to the Mortgages securing this Note and cancelled.
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Schedule 1 to Note
ASSETS CONSTITUTING SECURITY
AIRCRAFT LEASES AND RELATED INTERESTS
I. Southwest -- 1984 B737-3A4
Collateral
A. (1) a Lease with Southwest Airlines - 1984 B737-3A4
(2) Aircraft Model Serial No. FAA No.
Boeing 737-3A4 23251 N673AA
Engine Model Serial Nos.
CFM International CFM56-3B2 721120 and 721166
Owner - First Security Bank of Utah,
National Association, solely in its capacity
as Owner-Trustee. Sole beneficiary of the
Trust was originally Pegasus Capital
Corporation which then later sold such
beneficial interest to Echelon.
B. The beneficial interest of Echelon in the Trust that
owns the above Collateral.
II. Continental/Air Micronesia -- B727-224
Collateral
A. (1) a Lease with Continental/Air Micronesia B727-224
(2) Aircraft Model Serial No. FAA No.
Boeing 727-224 22448 N79745
Engine Model Serial Nos.
Xxxxx & Xxxxxxx JT8D-15 700707, 700721 and
700736
Owner - First Security Bank of Utah, National
Association, solely in its capacity as Owner-Trustee.
Sole beneficiary of the Trust was originally Pegasus
Capital Corporation which then later sold such
beneficial interest to Echelon.
B. The beneficial interest of Echelon in the Trust that
owns the above Collateral.
III. Series B Loan Certificate due 1995-1999 issued in connection with three
Boeing 737-2H4 Aircraft with Manufacturer's Serial Numbers 21593, 21721
and 21722 and initially bearing United States Federal Aviation
Administration Registration Nos. N55SW, N56SW and N57SW and six Xxxxx &
Whitney JT8D-9A engines.
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AIRCRAFT LOANS AND RELATED INTERESTS
I. A Note and Loan Agreement from First Security Bank of Utah, N.A., which
is secured by the Security Agreement and Assignment of Leases FBTDB,
dated as of June 28, 1990, between First Security Bank of Utah,
National Association and Progress Credit Corporation covering the
following:
(a) a Lease with ChallengAir DC 10-30
(b) Aircraft Model Serial No.
XxXxxxxxx Xxxxxxx DC-10-30 46850
DGAC (French) Registration No. - FBTDB
Belgian Registration Mark - OOJOT
Engine Model Serial No.
General Electric CF6-50C2R 455139, 455882 and
455817
II. A Note and Loan Agreement from First Security Bank of Utah, N.A., which
is secured by the Security Agreement and Assignment of Leases 310,
dated as of January 12, 1990, between First Security Bank of Utah,
National Association and Progress Credit Corporation covering the
following:
(a) a Lease with Trans World Airlines L1011-385-1
(b) Aircraft Model Serial No. FAA No.
Lockheed L1011-385-1 193B-1066 N31019
Engine Model Serial No.
Rolls Royce RB211-22B 10325, 10326 and 10461
OWNED REAL ESTATE
X. Xxxxxxx Station Record Studio - Gadsden County, Florida, Township 1
North, Range 2 West, Section 15.
II. 5th Avenue - Hillsborough County, Florida, El Xxxxx de Tampa Subdivision,
Block 2 and nearby parcels.
III. Riverside Ranch - Polk County, Florida, Township 26 South, Range 24 East,
Sections 11, 14, 23, 24 and 25.
IV. Royal Oaks - Leon County, Florida, Royal Oaks Unit No. 2 and nearby tracts
of 13.39 and 19.19 acres.
V. Progress Packaging - Hillsborough County, Florida, Section 32, Township 28
South, Range 18 East.
VI. Xxxxxxxxx - Hillsborough County, Florida, Section 16, Township 28 South,
Range 25 East.
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Schedule 2 to Note
Development Block - Seattle, King County, Washington, Lots 1 though 12, Volume 1
of Plats, page 103 owned by the REL Development Block Limited Partnership formed
by the partnership agreement by and between Development Block Corporation, as
the sole general partner, and US West Financial Services, Inc., Xerox Credit
Corporation, PLC Leasing Corporation, Xerox Financial Services Life Insurance
Company and Safeco Life Insurance Company, each as limited partners, dated April
30, 1993.
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