EXHIBIT 10.17
THE SECURITY REPRESENTED BY THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY
NOT BE TRANSFERRED OR SOLD, IN WHOLE OR IN PART, UNLESS REGISTERED OR EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ALL
APPLICABLE STATE SECURITIES LAWS.
FORM OF NOTE
$_______________ Whippany, New Jersey
_____________, 1997
FOR VALUE RECEIVED,________________________ , a _____________________
corporation (the "Company"), hereby unconditionally promises to pay to the order
of the parties listed on the attached Schedule A (each a "Lender" and
collectively the "Lenders"), in the respective percentages set forth opposite
each Lender's name on the attached Schedule A, the principal amount of _________
Dollars ($__________) in twelve (12) equal installments of $_______________ on
September 1, December 1, March 1 and June 1 of each year commencing September 1,
1997.
The Company will pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid balance of the principal of this Note on
September 1, 1997 and on each December 1, March 1, June 1 and September 1
thereafter at the rate of 7.0% per annum compounded annually (the "Applicable
Rate") until the principal amount of this Note, together with any accrued and
unpaid interest, is fully paid. Payments hereunder shall be applied first
against accrued and unpaid interest and then against the unpaid balance of the
principal hereof. If the Company shall default in the payment of the principal
of or interest on this Note when due and payable (whether upon a payment date,
upon Maturity Date or by acceleration hereof), the Company shall on demand, from
time to time, pay interest on such defaulted amount from the time of such
default until such defaulted amount is paid at a per annum rate equal to two
percent over the Applicable Rate. Notwithstanding anything contained herein to
the contrary, if at any time the rate of interest charged hereunder, together
with all other charges provided for herein which are treated as interest under
applicable law, shall exceed the maximum lawful rate which may be contracted
for, charged or received by a Lender in accordance with applicable law (the
"Maximum Rate"), the rate of interest, if any, payable under this Note, together
with all such other charges, shall be limited to the Maximum Rate.
All Payments hereunder shall be made in lawful money of this United States
of America at the address of each Lender set forth on Schedule A hereto, or at
such other place or places as each Lender may designate by notice to the
Company. This Note is issued by the Company as a dividend declared in connection
with the termination of the Company's status in accordance with and subject to
the terms and conditions herein set forth.
1. Subordination. If required pursuant to the terms of any Bank
Indebtedness (as hereinafter defined), the payment of the principal of and
interest on this Note shall be subordinated in right of payment to such Bank
Indebtedness and each Lender and each subsequent Holder or assign, by its
acceptance hereof, if required by the terms of such Bank Indebtedness, agrees to
enter into an appropriate subordination agreement acceptable to the holders of
such Bank Indebtedness. As used herein, "Bank Indebtedness" shall mean all
indebtedness of the Company for money borrowed (including principal, interest,
premium, if any, and fees, if any) from banks or other financial institutions,
whether outstanding on the date hereof or hereinafter incurred, as the same may
be extended, modified or renewed.
2. Waivers. The non-exercise by Lender of any of its rights hereunder
in any particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
3. Events of Default. In the case of the happening of any of the
following events (each, an "Event of Default"):
(a) The Company shall default in the payment of principal of and
interest on this Note, as and when due and payable, whether upon a Payment Date,
the Maturity Date, by acceleration hereunder or otherwise;
(b) Any obligor under any note issued to Lenders or the other
Existing Stockholders (as defined in the Registration Statement of 800-JR Cigar,
Inc.) on the date hereof shall default in the payment of principal of or
interest on such note, as and when due and payable, whether upon a payment date,
the maturity date, by acceleration thereunder or otherwise;
(c) The Company shall (i) become insolvent or admit in writing its
inability to pay its debts as they mature, (ii) apply for, consent to, or
acquiesce in the appointment of a receiver, trustee, liquidator or similar
official for itself or any of its assets, (iii) make a general assignment for
the benefit of creditors, (iv) be adjudicated as bankrupt or insolvent, (v)
voluntarily commence a proceeding or file a petition under any law relating to
bankruptcy, insolvency, the relief of debtors or the liquidation or adjustment
of indebtedness or (vi) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition
described in paragraph (c) below; or
-2-
(d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed under any law relating to bankruptcy, insolvency, the
relief of debtors or the liquidation or adjustment of indebtedness against the
Company, or the assets of the Company, and such proceeding or petition shall not
be dismissed within thirty (30) days;
then, and in any such event, and at any time thereafter during the continuance
of such event, the Lenders may, by five business days' prior written notice to
the Company, declare this Note to be (provided, however, that in the case of an
event described in paragraph (c) or (d) of this Section 4, this Note shall
automatically become) immediately due and payable, whereupon this Note shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Company,
anything contained herein to the contrary notwithstanding. In addition, upon the
occurrence of an Event of Default, the Lenders may exercise any or all rights,
powers and remedies available to the Lenders at law or in equity or by statute
or otherwise for the protection and enforcement of the rights of Lender.
4. Costs. The Company shall pay to Lenders, on demand, all costs and
expenses incurred to collect any indebtedness evidenced hereby, including,
without limitation, reasonable attorneys' fees.
5. Severability. In the event any one or more of the provisions of this
Note shall be held to be invalid, illegal or unenforceable, or operate to
invalidate this Note, then only such provision or provisions shall be deemed
null and void and shall not affect any other provision of this Note and the
remaining provisions of this Note, and the remaining provisions of this Note
shall remain operative and in full force and effect.
6. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED, INTERPRETED AND THE
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
JERSEY.
7. Titles. The titles, captions or headings of the paragraphs herein
are for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Note.
8. Miscellaneous.
(a) If this Note is mutilated, lost, stolen or destroyed, the
Company may issue a new Note of like form and maturity to the Holder hereof upon
presentment and surrender of the mutilated Note, in the case of mutilation, and
upon receipt of evidence satisfactory to the Company of loss, theft or
destruction in all other cases.
(b) All agreements of the Company in this Note shall bind its
successor.
-3-
(c) The terms of this Note may be amended, modified or supplemented
by the Company with the consent of the Lenders and Holders of a majority of the
then outstanding principal amount of this Note; provided, however, that, without
the consent of each Lender and Holder of this Note, the interest rate and the
principal amount of this Note may not be reduced, the date when interest or
principal under this Note becomes due, and this Section 12(c) may not be
amended, modified or supplemented.
[NAME OF CORPORATION]
By:
--------------------------------
Name:
Title:
(Corporate Seal)
ATTEST:
By:
-----------------------------
Name:
Title:
-4-
SCHEDULE A
Lender Principal Amount
------ ----------------
Xxxxx Xxxxxx Xxxxxxx..................................... [$___________]
La Xxxxx Xxxxxxx......................................... [$___________]
[Xx Xxxxx Xxxxxxx and Xxxxx Xxxxxx
Xxxxxxx, Trustees and Xxxxxx Xxxxxxxxx
as Special Trustee of trust f/b/o Xxxxx
Xxxxxxx created under trust agreement
dated November 1, 1994, Xxxxx Xxxxxxx Grantor](1)........ [$___________]
[Xx Xxxxx Xxxxxxx and Xxxxx Xxxxxx
Xxxxxxx, Trustees and Xxxxxx Xxxxxxxxx
as Special Trustee of trust f/b/o Xxxx
Xxxxxxx created under trust agreement
dated November 1, 1994, Xxxxx Xxxxxxx Grantor](1)........ [$___________]
[Xx Xxxxx Xxxxxxx and Xxxxx Xxxxxx
Xxxxxxx, Trustees and Xxxxxx Xxxxxxxxx
as Special Trustee of trust f/b/o Xxxxxxxx
Xxxxxxx created under trust agreement
dated November 1, 1994, Xxxxx Xxxxxxx Grantor](1)........ [$___________]
La Xxxxx Xxxxxxx and Xxxxx Xxxxxx
Xxxxxxx, Trustees and Xxxxxx Xxxxxxxxx
as Special Trustee of trust f/b/o Xxxxx
Xxxxxxx created under trust agreement
dated November 1, 1994, Xxxxx Xxxxxxx Grantor](1)........ [$___________]
--------
(1) To be included on Schedule A to the Note issued by J.R. Statesville, Inc.
only.
