EXHIBIT 10.2
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN THIS NOTE IS
SUBJECT TO AND PAYMENTS OF PRINCIPAL AND INTEREST IN RESPECT OF THIS NOTE ARE
SUBORDINATED, TO THE EXTENT AND IN THE MANNER SPECIFIED IN THAT CERTAIN DEBT
SUBORDINATION AGREEMENT DATED NOVEMBER 21, 1990, AMONG BORROWER, LENDER AND
STANCHART BUSINESS CREDIT, INC., THAT CERTAIN SELLER DEBT SUBORDINATION
AGREEMENT DATED AS OF JANUARY 23, 1991, AMONG BORROWER, LENDER AND BW CAPITAL
CORPORATION (COLLECTIVELY THE "SUBORDINATION AGREEMENTS") AND THAT CERTAIN POST-
CLOSING AGREEMENT DATED AUGUST 2, 1991, AMONG BORROWER AND XXXXX XXXXXXX TO ALL
SUPERIOR DEBT OF BORROWER, AS DEFINED IN THE SUBORDINATION AGREEMENTS AND THE
POST-CLOSING AGREEMENT.
--------------------------------------------------------------------------------
AMENDED AND RESTATED PROMISSORY NOTE
------------------------------------
US $200,000.00 August 16, 0000
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned ADVANCED MATERIALS GROUP, INC., a
Nevada corporation, successor to WILSHIRE FOAM PRODUCTS, INC., a California
corporation (hereinafter "Borrower"), hereby promises to pay to the order of
XXXXX X. XXXXXXX and XXXX X. XXXXXXX, Trustees of the XXXXXXX TRUST, est.
9/21/87 (hereinafter "Lender"), in such coin or currency of the United States
which shall be legal tender in payment of all debts and dues, public and
private, at the time of payment, the principal sum of TWO HUNDRED THOUSAND AND
NO/100 DOLLARS (US $200,000.00), together with simple interest from and after
March 1, 1991, on the unpaid principal balance outstanding at a rate per annum
equal to the lesser of twelve percent (12%) or the maximum rate permitted by
law.
Interest hereunder shall be computed on the basis of actual days elapsed
over the period of a 360-day year.
Interest and any principal on this Note shall be due and payable in
consecutive monthly installments of Two Thousand Dollars ($2,000.00) per months
commencing on August 1, 1991, and continuing on the first day of every month
thereafter until June 1, 1997, when all unpaid principal and accrued interest
shall become due and payable. Each payment made hereunder shall be applied
first to accrued interest and then to principal.
If this Note is required to be collected by or through an attorney at law,
then Borrower shall be obligated to pay, in addition to the principal balance
and accrued interest, reasonable attorneys' fees.
To the fullest extent permitted by applicable law, Borrower, for itself and
its legal representatives, successors and assigns, expressly waives presentment,
demand, protest, notice of
dishonor, notice of nonpayment, notice of maturity, notice of protest, and
diligence in collection.
Whenever possible each provision of this Note shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note. No delay or failure on the part of the Lender in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Lender
of any right or remedy preclude any other right or remedy.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California.
This Note is issued pursuant to and is subject to that certain Purchase
Agreement dated October 1, 1990, by and among Borrower and Wilshire Foam
Products, Inc., (thereafter known as S&J Liquidating Corp.) and Messrs. Xxxxxxx
X. Xxxxxxxx and Xxxxx Xxxxxxx (the "Purchase Agreement"), as amended. All of
the terms, covenants, and conditions of the Purchase Agreement are incorporated
herein by reference except to the extent they conflict with the terms of this
Note. The Note is nonassignable.
As long as all debts to which this Note is subordinated pursuant to the
Post-Closing Agreement have been fully satisfied, the occurrence of an "Event
of Default" under this Note shall entitle Lender or its assignee at its
option to declare the balance of the principal of the Note immediately due
and payable, without notice to or demand upon Borrower, all of which Borrower
hereby expressly waives. An "Event of Default" by Borrower under this Note
shall occur only if one of the following occurs after August 16, 1995, (i)
Borrower fails to pay six (6) consecutive monthly installment payments when
due under this Note, (ii) there is a change in ownership or control of fifty
percent (50%) or more of the issued and outstanding common stock of Borrower
in one or a series of related transfers (excluding transfers of the stock
held by Lender), (iii) Borrower sells, transfer, leases or otherwise disposes
of, whether by sale or otherwise, substantially all of its assets, or (iv)
Borrower acquires, merges or consolidates with or into any other business
organization and the shareholders of Borrower do not own a majority of the
ownership interest of the surviving organization.
Until all amounts due hereunder have been paid in full, and so long as (1)
Lender is not in violation of its obligations under the covenant not to compete
under the Purchase Agreement, or (2) Lender is not working for a competitor of
Borrower, Borrower agrees to deliver to Lender or its assignee, within thirty
(30) days after the end of each month, a balance sheet and profit and loss
statement covering Borrower's operations during
2
such period and agrees to deliver to Lender or its assignee within ninety (90)
days after the end of each Borrower's fiscal years, an audited statement of the
financial condition of Borrower for each such fiscal year.
Time is of the essence of this Note.
This Note may be repaid in whole or in part without penalty. All partial
prepayments, whether mandatory or voluntary, shall be applied to installments of
principal in the inverse order of their maturities.
This Note amends, restates and replaces the Secured Promissory Note dated
November 16, 1990 by WFI ACQUISITION CORP. in favor of WILSHIRE FORM PRODUCTS,
INC. (a different corporation from the undersigned) in the amount of TWO HUNDRED
FIFTY THOUSAND AND NO/100 DOLLARS (US $250,000.00) and the Amended and Restated
Promissory Note dated August 2, 1991, by WILSHIRE FOAM PRODUCTS, INC. in favor
of XXXXX X. XXXXXXX and XXXX X. XXXXXXX, Trustees of the XXXXXXX TRUST, est.
September 21, 1987 in the amount of TWO HUNDRED THOUSAND DOLLARS (U.S.
$200,000).
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed,
sealed and delivered in Rancho Xxxxxxxxx, California, on the date first above-
written.
ADVANCED MATERIALS GROUP,
INC., a Nevada corporation
("Borrower")
/s/Xxxxx X. Xxxxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxxxx
Title: Vice President
and Controller
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NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN THIS NOTE IS
SUBJECT TO AND PAYMENTS OF PRINCIPAL AND INTEREST IN RESPECT OF THIS NOTE ARE
SUBORDINATED, TO THE EXTENT AND IN THE MANNER SPECIFIED IN THAT CERTAIN DEBT
SUBORDINATION AGREEMENT DATED NOVEMBER 21, 1990, AMONG BORROWER, LENDER AND
STANCHART BUSINESS CREDIT, INC., THAT CERTAIN SELLER DEBT SUBORDINATION
AGREEMENT DATED AS OF JANUARY 23, 1991, AMONG BORROWER, LENDER AND BW CAPITAL
CORPORATION (COLLECTIVELY THE "SUBORDINATION AGREEMENTS") AND THAT CERTAIN POST-
CLOSING AGREEMENT DATED AUGUST 2, 1991, AMONG BORROWER AND XXXXX XXXXXXX TO ALL
SUPERIOR DEBT OF BORROWER, AS DEFINED IN THE SUBORDINATION AGREEMENTS AND THE
POST-CLOSING AGREEMENT.
--------------------------------------------------------------------------------
AMENDED AND RESTATED PROMISSORY NOTE
-------------------------------------
US $265,000.00 August 16, 0000
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned ADVANCED MATERIALS GROUP, INC., a
Nevada corporation and a successor to WILSHIRE FOAM PRODUCTS, INC., a
California corporation (hereinafter "Borrower"), hereby promises to pay to
the order of XXXXX X. XXXXXXX and XXXX X. XXXXXXX, Trustees of the XXXXXXX
TRUST, est. 9/21/87 (hereinafter "Lender"), in such coin or currency of the
United States which shall be legal tender in payment of all debts and dues,
public and private, at the time of payment, the principal sum of TWO HUNDRED
SIXTY-FIVE THOUSAND AND NO/100 DOLLARS (US $265,000.00), together with simple
interest from and after November 30, 1990, on the unpaid principal balance
outstanding at a rate per annum equal to (i) eight percent (8%) until
November 30, 1995, and (ii) 10% thereafter.
Interest hereunder shall be computed on the basis of actual days elapsed
over the period of a 360-day year.
All accrued and unpaid interest through November 30, 1995, shall be paid on
or before November 30, 1995. Accrued and unpaid interest thereafter shall be
due and payable monthly no later than the 10th of the month. The entire unpaid
principal balance and all remaining accrued, unpaid interest on this Note shall
be due and payable on November 30, 1996.
If this Note is required to be collected by or through an attorney at law,
then Borrower shall be obligated to pay, in addition to the principal balance
and accrued interest, reasonable attorneys' fees.
To the fullest extent permitted by applicable law, Borrower, for itself and
its legal representatives, successors and assigns, expressly waives presentment,
demand, protest, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, and diligence in collection.
Whenever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or remaining
provisions of this Note. No delay or failure on the part of Lender in the
exercise of any right or remedy hereunder shall operate as a waiver thereof,
nor as an acquiescence in any default, nor shall any single or partial
exercise by Lender of any right or remedy preclude any other right or remedy.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California.
This Note is issued pursuant to and is subject to that certain Purchase
Agreement dated October 1, 1990, by and among Borrower and Wilshire Foam
Products, Inc., (thereafter known as S&J Liquidating Corp.) and Messrs.
Xxxxxxx X. Xxxxxxxx and Xxxxx Xxxxxxx (the "Purchase Agreement"), as amended,
and is entitled to all of the benefits of the Purchase Agreement, including,
but not limited to right of offset. All of the terms, covenants, and
conditions of the Purchase Agreement are incorporated herein by reference
except to the extent they conflict with the terms of this Note. This Note is
nonassignable.
As long as all debts to which this Note is subordinated pursuant to the
Post-Closing Agreement have been fully satisfied, the occurrence of an "Event
of Default" under this Note shall entitle Lender or its assignee at its
option to declare the balance of the principal of the Note immediately due
and payable, without notice to or demand upon Borrower, all of which Borrower
hereby expressly waives. An "Event of Default" by Borrower under this Note
shall occur only if one of the following occurs after this Note shall occur
only if one of the following occurs after August 16, 1995, (i) Borrower fails
to pay six (6) consecutive monthly installment payments due under this Note,
(ii) there is a change in ownership or control of fifty percent (50%) or more
of the issued and outstanding common stock of Borrower in one or a series of
related transfers (excluding transfers of the stock held by Lender), (iii)
Borrower sells, transfer, leases or otherwise disposes of, whether by sale or
otherwise, substantially all of its assets, or (iv) Borrower acquires, merges
or consolidates with or into any other business organization and the
shareholders of Borrower do not own a majority of the ownership interest of
the surviving organization.
Until all amounts due hereunder have been paid in full, and so long as (1)
Lender is not in violation of its obligations under the covenant not to compete
under the Purchase Agreement, or (2) Lender is not working for a competitor of
Borrower, Borrower agrees to deliver to Lender or its assignee, within thirty
(30) days after the end of each month, a balance sheet and profit and loss
statement covering Borrower's operations during such period and agrees to
deliver to Lender or its assignee within ninety (90) days
2
after the end of each Borrower's fiscal years, an audited statement of the
financial condition of Borrower for each such fiscal year.
Time is of the essence of this Note.
This Note may be repaid in whole or in part without penalty. All partial
prepayments, whether mandatory or voluntary, shall be applied to installments of
principal in the inverse order of their maturities.
This Note amends, restates and replaces the Promissory Note dated
November 16, 1990 by WFI ACQUISITION CORP. in favor of WILSHIRE FOAM
PRODUCTS, INC. in the amount of TWO HUNDRED SIXTY-FIVE THOUSAND AND NO/100
DOLLARS (US $265,000.00) and the Amended and Restated Promissory Note dated
August 2, 1991, by WILSHIRE FOAM PRODUCTS, INC. in favor of XXXXX X. XXXXXXX
and XXXX X. XXXXXXX, Trustees of the XXXXXXX TRUST, est. September 21, 1987
in the amount of TWO HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS (U.S.
$265,000).
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed,
sealed and delivered in Rancho Xxxxxxxxx, California, on the date first above-
written.
ADVANCED MATERIALS GROUP, INC.
a Nevada corporation ("Borrower")
/s/Xxxxx X. Xxxxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxxxx
Title: Vice President
and Controller
3
