PROMISSORY NOTE
Exhibit 10.5
Exhibit
10.5
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$_________________
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_______,
20__
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Salt
Lake City, Utah
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For value
received XXXXX BROTHERS AVIATION, INC., a Utah corporation having an address at
0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx X, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Company"). promises
to pay to ______________________, a ________________________, or its assigns
(the "Lender"),
the principal sum of _____________________DOLLARS and NO/100 ($________),
together with interest on the unpaid principal balance hereof at the rate and at
the times set forth herein.
This
Promissory Note (the "Note") is issued in
satisfaction of the accrued and unpaid dividends through the date hereof in
respect of the outstanding shares of the Company’s Series B 15% Cumulative
Non-Voting Preferred Stock (“Series B Stock”)
owned by the Lender (the “Dividends”).
1.
Payment of
Interest. Interest shall accrue on the unpaid principal balance of this
Note at the rate of fifteen percent (15.0%) per annum, compounded quarterly. All
accrued and unpaid interest shall be payable on the Maturity Date (as defined
below).
2.
Payment of Principal.
The entire outstanding principal balance of this Note, together with all accrued
and unpaid interest and all other amounts due hereunder, shall be due and
payable on April 9, 2009 (the "Maturity
Date'").
3.
Manner of Payment.
All sums payable under this Note shall be paid in lawful money of the United
States of America and in immediately available funds. Payments shall
be made to the Lender at ___ _____________________________________(or at such
other address or by wire transfer to such account as shall, in either case, be
specified by the Lender to the Company at least five (5) days prior to the
relevant payment date). If any payment under this Note shall become
due on a Saturday, Sunday or a bank or legal holiday, such payment shall be due
on the next succeeding business day.
4.
Prepayment. Company
may, at its option, prepay this Note, in whole or in part, at any time and from
time to time, without premium or penalty upon one (1) day prior written notice
to Lender.
5.
Late
Charges. If any sum of money required to be paid by the terms of this
Note is not paid within ten (10) days after the same becomes due, then the
Company will pay a late fee equal to five percent (5%) of the overdue payment.
The Company will pay this late fee promptly, but only once on each late
payment.
6. Events of Default.
The occurrence of any of the following events shall constitute an "Event of Default"
under this Note:
i. failure
to pay when due any payment of principal, interest or other amount due
and owing
under this Note on or before the date such payment is due;
ii. Borrower
becomes the subject of any Bankruptcy proceeding, or is declared Bankrupt,
while this Note is still outstanding. "Bankruptcy" shall
mean (i) the adjudication of Borrower as bankrupt or insolvent, (ii) the
institution by or against Borrower of a petition for arrangement or of any other
type of insolvency proceeding under the United States Bankruptcy Code, as
amended (but, with respect to an involuntary proceeding, only if such proceeding
is not discharged within 60 days), (iii) the making by Borrower of a general
assignment for the benefit of creditors, (iv) the appointment of a liquidator,
administrator, receiver or trustee in bankruptcy of Borrower or its assets or
(v) the taking, making or institution of any like or similar act or proceeding
involving Borrower;
iii. the
Lender determines that there has been a material adverse change in Borrower,
Borrower's
financial condition or Borrower's business prospects;
iv. Borrower
breaches any of the material covenants, conditions, promises or agreements
contained in this Note or the Purchase Agreement;
v. the
occurrence of any breach, default or "event of default" as defined or
described
in any other now existing or future promissory note or other instrument, or any
guaranty, mortgage or security agreement, representing or securing indebtedness
of Borrower (or any of its Affiliates) to Lender (or any of its
Affiliates).
"Affiliate" means,
with respect to any person or entity, any person or entity controlling,
controlled by or under common control with the specified person or entity.
"Control." for
the foregoing purposes, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether through the ownership of voting securities or voting
interests, by contract or otherwise.
7.
Remedies. Upon
the maturity of this Note (whether at the stated Maturity Date, by acceleration
or otherwise), all amounts due under this Note, including the unpaid balance of
principal and interest hereof, shall, at the option of the Lender (but
automatically with respect to an Event of Default described in Section 6(ii)),
become immediately due and payable, and the Lender may exercise any of its
rights and remedies granted herein, under applicable law or that the Lender may
otherwise have against Borrower. Such remedies shall be cumulative and
concurrent and may be pursued singly, successively or together, in Lender's sole
and absolute discretion and as often as occasion therefor shall arise. Failure
by the Lender to exercise any of its remedies shall not constitute a waiver of
the right to exercise the same at any subsequent time.
8.
Covenants. The
Company shall not, without the prior written permission of the Lender, issue
notes of the Company or otherwise incur indebtedness, except for indebtedness
not to exceed $57,000,000 in the aggregate (the “Debt Cap”); providedthat the company may
incur indebtedness in excess of the Debt Cap if all proceeds from such
indebtedness are applied immediately upon receipt by the Company toward the
repayment of this Note or other outstanding debt of the Company owing to the
Lender and/or its affiliates.
9.
Collection Costs.
Borrower hereby agrees to pay all costs and expenses of collection of this Note
that are paid or incurred by the Lender (including, without limitation, the fees
and all disbursements of the Lender's attorneys) (collectively, "Collection Costs"!
irrespective of whether an action has been commenced against
Borrower.
10.
No Usury. In no
contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Lender for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto; and, in the event of any such payment
inadvertently paid by the Company or inadvertently received by Lender, such
excess sum shall be, at the Company's option, returned to Company forthwith or
credited as a payment of principal, but shall not be applied to the payment of
interest. It is the intent hereof that the Company not pay or contract to pay,
and that Lender not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by the
Company under applicable law.
11.
Miscellaneous.
i. This
Note may be amended or modified only by an instrument in writing signed
by the
Company and the Lender.
ii. All
payments under this Note shall be applied first to Collection Costs, next to
accrued
interest and thereafter to principal.
iii. Presentment,
demand, protest and other notice of any kind are hereby expressly waived by
the Company.
i
v. No delay or omission on the
part of the Lender in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, and no partial exercise of any
right or remedy precludes other or further exercise thereof or the exercise of
any other rights or remedy.
v. If
any provision of this Note is invalid and unenforceable in any jurisdiction,
then, to
the fullest extent permitted by law, (a) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Lender in order to carry out the purposes of this Note
as nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
vi. This
Note shall be jointly and severally binding upon the Company and its
successors
and assigns.
vii. In
the event this Note and/or any payments hereunder are avoided in any
bankruptcy,
insolvency or similar proceeding instituted by or against the Company, the
obligation of the Company in respect of the Dividends shall be deemed reinstated
and continue in full force and effect to the same extent as though this Note had
never been originally made.
viii. This
Note shall be pari passu in respect of those certain other promissory notes of
the
Company issued concurrently herewith to other holders of the Series B Stock in
satisfaction of the accrued and unpaid dividends thereon..
ix.
THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND/OR ANY
DOCUMENT EXECUTED IN CONJUNCTION HEREWITH AND/OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WIIETHER ORAL OR WRITTEN) OR ACTIONS OF
OR BY THE COMPANY OR THE LENDER.
This Note
shall be construed in accordance with, and be governed by, the internal laws of
the State of New York, without giving effect to the choice of law principles
thereof.
[Signature
appears on following page]
IN
WITNESS WHEREOF, the Company has caused this Note to be executed the day and
year first above written.
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XXXXX
BROTHERS AVIATION, INC.
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By
___________________________________
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Name:
Xxxxx Xxxxx
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Title:
President & CEO
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Exhibit
10.5 Cont’x
Xxxxx
Brothers Aviation, Inc.
Schedule
of Promissory Notes Issued Under the Note Purchase Agreement Dated October 9,
2008 in Payment of Series B Preferred Stock Dividends
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Date
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Lender
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Principal
Amount
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October
9, 2008
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Westford
Special Situations Master Fund L.P.
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$20,458,009.44
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October
9, 2008
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Westford
Special Situations Fund II, L.P.
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738,457.56
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October
9, 2008
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Westford
Special Situations Fund II Ltd.
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6,153,813.00
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October
9, 2008
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Capital
Strategies Fund, Ltd.
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9,611,350.00
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