EXHIBIT 4.18
NON-RECOURSE PROMISSORY NOTE
$_________ August 17, 1995
FOR VALUE RECEIVED, the undersigned,________________, an individual
residing in _________________ ("Borrower"), promises to pay to the order of
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Xxxxxxx Products, Inc., a Delaware corporation ("Holder" or "Company"), or any
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successor thereof, the sum of ________________ ($________) with interest from
the date hereof on the unpaid principal sum from time to time outstanding
accruing at the rate of 7% per annum compounded annually on March 31 of each
year, commencing with March 31, 1996 (the "Non-Default Interest Rate"). Accrued
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interest will be paid on or before March 31 of each year commencing with March
31, 1996, and principal of, and all accrued and unpaid interest on, this Note
will be paid upon the earlier of March 31, 2006 or within ninety (90) days after
Borrower ceases to be an employee (for any reason or no reason) of Holder, or
any of its subsidiaries.
All payments of principal and interest on this Note are payable at
Holder's office at c/x Xxxxxxx Products, Inc., 000 X. Xxxxxx Xxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Chief Executive Officer, or at such other place as
Holder shall notify Borrower in writing. Principal and interest shall be
payable in United States currency that at the time is legal tender for the
payment of public and private debts.
This Note is executed and delivered together with a certain Pledge
Agreement dated as of even date herewith (the "Pledge Agreement") between
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Borrower and Holder which, among other things, secures payment of this Note. In
the event of a Default (as hereinafter defined) under this Note, Holder shall be
entitled to enforce his rights against the Pledged Collateral (as defined in the
Pledge Agreement) with respect to the amount due under the Note upon such
Default.
So long as any amounts remain outstanding under this Note, or any shares
of Class C Common Stock of the Company, par value $0.01 per share ("Common
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Stock"), or any other capital stock of the Company (collectively, the "Stock"),
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owned by Borrower shall be subject to the Pledge Agreement, Borrower shall not
sell or transfer such Stock; however, in the event that at any time Borrower
shall, in violation of the terms of this Note, sell or transfer any of the
Stock, any interest in the Stock or other equity interest of the Company, of
which he is the owner,
Borrower shall apply, from time to time, upon, and only to the extent of
receipt, the net cash proceeds of such sale or transfer (after allowance for any
federal, state and local income taxes payable with respect to such sale) to the
prepayment of this Note; such prepayment shall be charged first against accrued
interest and then against principal, and then against any other obligations in
respect of this Note, provided, such prepayment shall not affect Xxxxxx's right
to declare a Default (as hereinafter defined) under this Note. In addition, this
Note shall be prepaid to the extent provided in the Pledge Agreement. Borrower
may prepay this Note in whole or in part, without penalty, at any time, provided
that at the time of any such prepayment, Borrower shall also pay all accrued
interest on the amount of the principal sum so prepaid.
Upon the happening of any Default of Borrower of the type specified in
paragraph (a) below, Holder at its option may declare the entire unpaid balance
of the amount owed by Borrower under this Note, together with interest accrued
thereon, to be due and payable 90 days after such declaration, and upon the
happening of any other Default, Holder at its option may declare the entire
unpaid balance of the amount owed by Xxxxxxxx under this Note, together with
interest accrued thereon, to be immediately due and payable.
Each of the following shall constitute a "Default" of Borrower:
(a) failure to make any payment of principal or interest within 10
business days of when due hereunder and the same shall have not been cured
within 45 days after written notice thereof has been given to the
Borrower;
(b) any representation of Borrower contained in the Pledge Agreement
shall prove to have been false or misleading in any material respect as of
the time made;
(c) Borrower shall default in the performance or observance of any
covenant or provision contained herein or in the Pledge Agreement and the
same shall not have been cured within 60 days after written notice thereof
has been given to the Borrower;
(x) Xxxxxxxx assigns any of his obligations under this Note to any
person or entity other than in connection with his death, or by operation
of law in connection with his death;
(e) Xxxxxxxx (i) generally is not paying his debts as they become
due; (ii) shall admit in writing his inability to pay his debts generally;
(iii) shall make a general
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assignment for the benefit of creditors; or (iv) commences any proceeding
relating to him under any other bankruptcy, reorganization, arrangement,
readjustment of debt, receivership, dissolution, liquidation or similar
law or statute of any jurisdiction, whether now or hereafter in effect, or
any other procedure for the relief of financially distressed debtors;
(f) there is commenced by or against Borrower any proceeding under
any other applicable bankruptcy, insolvency, reorganization or other
similar law seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts, or seeking the entry
of an order for relief or the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, agent or custodian (or other similar
official) for him or any substantial part of his property, and relief
against him is ordered in such proceeding or such proceeding remains
undismissed for a period of 60 days or more.
(g) Borrower's employment by the Company or its subsidiaries is
terminated for any reason.
Upon the occurrence of any Default of Borrower, interest on the
outstanding amount of Xxxxxxxx's debt to Holder hereunder shall accrue, in lieu
of the aforementioned rate, at a per annum rate equal to two percent over the
Non-Default Interest Rate. All payments received by Holder from Borrower on this
Note after such default shall be applied by Xxxxxx to Xxxxxxxx's debt hereunder
as follows: first, to accrued and unpaid interest; second, to the reduction of
principal; and third, to any other obligations in respect of this Note.
EXCEPT AS PROVIDED IN THE IMMEDIATELY FOLLOWING PARAGRAPH AND WITH REGARD
TO THE PLEDGED COLLATERAL, THIS NOTE AND ALL OBLIGATIONS OF BORROWER HEREUNDER
SHALL BE NON-RECOURSE TO BORROWER PERSONALLY, AND BORROWER SHALL NOT BE
PERSONALLY OBLIGATED OR LIABLE UNDER THIS NOTE AND FOR SUCH OBLIGATIONS, AND
XXXXXX'S SOLE AND EXCLUSIVE RECOURSE UNDER THIS NOTE AND FOR SUCH OBLIGATIONS
WILL BE WITH REGARD TO THE PLEDGED COLLATERAL PURSUANT TO THIS NOTE AND THE
PLEDGE AGREEMENT.
In the event this Note is turned over to any attorney at law for
collection after any Default of Borrower, in addition to principal and interest,
Holder shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys' fees and costs incurred in connection with any
of Holder's collection efforts, whether or not suit on this Note is filed, and
all such costs and expenses shall be payable by
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Borrower on demand and also shall be secured by all other collateral at any time
held by Xxxxxx as security for Xxxxxxxx's obligations to Holder, it being
understood, without limiting the generality of the foregoing, that Borrower
shall have personal liability for an amount equal to any such costs and
expenses.
No failure on the part of Holder or other holder hereof to exercise any
right or remedy hereunder with respect to Xxxxxxxx, whether before or after the
happening of a Default of Borrower, shall constitute waiver of any future
Default or of any other Default of Borrower. No failure to accelerate the debt
of Borrower evidenced hereby by reason of a Default of Borrower or indulgence
granted from time to time shall be construed to be a waiver of the right to
insist upon prompt payment thereafter, or shall be deemed to be a novation of
this Note or a reinstatement of such debt evidenced hereby or a waiver of such
right of acceleration or any other right, or be construed so as to preclude the
exercise of any right Holder may have, whether by the laws of the state
governing this Note, by agreement or otherwise, and Borrower hereby expressly
waives the benefit of any statute or rule of law or equity that would produce a
result contrary to or in conflict with the foregoing. This Note may not be
modified orally, but only by an agreement in writing signed by the party against
whom such agreement is sought to be enforced.
Xxxxxxxx, for himself and his heirs, successors and assigns, hereby waives
presentment, protest, demand, diligence, notice of dishonor and of nonpayment,
and waives and renounces all rights to the benefits of any statute of
limitations or any moratorium, appraisement, or exemption now provided or that
hereafter may be provided by any applicable federal or state statute, both as to
himself personally and as to all of his property, whether real or personal,
against the enforcement and collection of the obligations evidenced by this Note
and any and all extensions, renewals, and modifications hereof.
Each of the Holder and Borrower intends that the obligations evidenced by
this Note conform strictly to the applicable usury laws as are from time to time
in force. All agreements between Borrower and Holder, whether now existing or
hereafter arising and whether oral or written, hereby are expressly limited so
that in no contingency or event whatsoever, whether by acceleration of maturity
hereof or otherwise, shall the amount paid or agreed to be paid to Holder, or
collected by Xxxxxx, by or on behalf of Borrower for the use, forbearance or
detention of the money to be loaned to Borrower hereunder or otherwise; or for
the payment or performance of any covenant or obligation contained herein of
Borrower to Holder, or in any other document evidencing, securing or pertaining
to such indebtedness evidenced hereby, exceed the maximum amount permissible
under applicable usury law. If under any
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circumstances whatsoever fulfillment of any provision hereof or any other
document, at the time performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law, then, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if under any
circumstances Holder ever shall receive from or on behalf of Borrower an amount
deemed interest, which would exceed the highest lawful rate under applicable
law, such amount that would be excessive interest under applicable usury laws
shall be applied to the reduction of Xxxxxxxx's principal amount owing hereunder
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and such other indebtedness, the excess shall be
deemed to have been a payment made by mistake and shall be refunded to Borrower
or to any other person making such payment on Xxxxxxxx's behalf.
This Note is binding upon Xxxxxxxx's successors and heirs, shall inure to
the benefit of Xxxxxx, its successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of laws. The Borrower hereby irrevocably submits on
a non-exclusive basis to the jurisdiction of the federal courts of the United
States of America, the courts of New York and any courts competent to hear
appeals therefrom.
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IN WITNESS WHEREOF, Xxxxxxxx has executed this instrument on the date
first above written.
WITNESS: BORROWER:
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Print Name:
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Print Home Address:
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