THIS SUBORDINATED NOTE IS THE SUBORDINATED NOTE REFERENCED IN THAT CERTAIN
SUBORDINATION AGREEMENT DATED AS OF THE DATE HEREOF BY AND AMONG THE MAKER, THE
PAYEES, AND LASALLE BUSINESS CREDIT, INC., AS AGENT FOR STANDARD FEDERAL BANK
NATIONAL ASSOCIATION (THE "SUBORDINATION AGREEMENT") AND IS ISSUED UNDER AND
SUBJECT IN ALL WAYS TO THE SUBORDINATION AGREEMENT.
AMENDED AND RESTATED
SUBORDINATED PROMISSORY NOTE
$1,000,000.00 Date: July 1, 2002
FOR VALUE RECEIVED, AM NEX-LINK COMMUNICATIONS, INC., a Delaware
corporation (the "Maker"), hereby promises to pay to the order of 1401077
ONTARIO, LTD., 1418294 ONTARIO, LTD., XXXXXX XXXXXX and XXXXX XXXXXXXX (each a
"Payee" and, collectively, the "Payees") the principal amount of ONE MILLION
DOLLARS ($1,000,000.00) (subject to adjustment as described below), with
interest at the rate of five percent (5%) per annum.
The outstanding principal balance of this Amended and Restated
Subordinated Promissory Note shall be payable in three (3) equal annual
installments in the amount of $333,333.33 each on the first, second and third
anniversaries of the date first set forth above. All interest accruing on this
Subordinated Note in each calendar quarter shall be due and payable on the first
day of the following calendar quarter, commencing on October 1, 2002, and shall
become immediately due and payable upon the principal hereof becoming due and
payable.
Both the principal of and interest on this Note are payable in
lawful money of the United States of America to the Payees, at such address as
may be specified in writing by the Payees to the Maker in writing from time to
time, in same day funds.
Interest on the unpaid principal balance hereof, if any, shall
be computed on the basis of a 360-day year for the actual number of days
elapsed.
In the event that any payment of interest or principal
hereunder shall not be received by the Payees within ten (10) days of its due
date, the Payees shall, in addition to and not to the exclusion of its other
rights under this Note, be entitled to, and the Maker shall jointly and
severally pay to the Payees, a late charge in an amount equal to five percent
(5%) of the overdue payment. Late charges assessed by the Payees are immediately
due and payable.
This Note may at the Maker's option be prepaid in whole or in
part, at any time and from time to time, without penalty or premium. Any partial
prepayment shall be applied first to accrued and unpaid interest to date and
then to the principal payments due under this Note in the inverse order of
maturity.
If the date of any payment required by this Note be Saturday,
Sunday or a bank holiday, such payment shall be payable on the first business
day following such date. Payments made pursuant to this Note shall be deemed
made the business day payment is received by the Payees; payments received after
3:00 P.M. shall be deemed made the next business day.
This Amended and Restated Subordinated Promissory Note is
being delivered pursuant to Section 2.01(b)(ii) of the Agreement and Plan of
Merger dated June 3, 2002 by and between the Maker, AM Broadband Services, Inc.,
Nex-Link Communication Project Services LLC, and the Payees (the "Merger
Agreement"), and the principal amount of this Note is subject to adjustment
pursuant to Section 2.03 of the Merger Agreement. In the event that the
principal amount of this Note is adjusted pursuant to Section 2.03 of the Merger
Agreement, the Maker shall prepare and deliver to the Payees a substitute
Subordinated Note reflecting the adjusted principal amount, and this Note shall
be null and void.
Each of the following shall constitute an "Event of Default"
under this Note:
(a) Any material representation, statement or
warranty made by any Maker herein, or furnished hereunder or in the Merger
Agreement, or otherwise in connection with the Merger Agreement, shall prove to
have been incorrect in any material respect when made; or
(b) The Maker shall default in the payment when due,
whether by acceleration or otherwise, of any amount due under this Note or under
the Merger Agreement; or
(c) The Maker shall default in the performance or
observance of any term, covenant or agreement contained herein (other than as
specified in subparagraph (b) above), in the Merger Agreement, or in any other
agreement, document or instrument delivered to the Payees or any of its
affiliates pursuant to the terms and provisions of the Merger Agreement, and
such default shall remain unremedied for thirty (30) days after written notice
thereof shall have been received by the Maker from the Payees; or
(d) A receiver shall be appointed with respect to the
Maker, or any of his or its assets, or any attachment, garnishment, levy or lien
shall be made, issued or filed against any of his or its assets, and such action
shall not be discharged or stayed within fifteen (15) days; or
(e) The Maker shall (i) apply for, consent to or
permit the appointment of a trustee or liquidator of him or it, or of all or a
substantial part of his or its assets, (ii) be unable, or admit in writing his
or its inability, to pay debts as they mature, (iii) make a general assignment
for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent, or
(v) file a voluntary petition in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors or to take advantage of any
insolvency law, or an answer admitting the material allegations of a petition
filed against him or it in any such proceeding; or
(f) A judgment or judgments for the payment of money
in excess of the sum of $10,000.00 in the aggregate shall be rendered against
the Maker, which shall remain unsatisfied and in effect for any period of
fifteen (15) consecutive days without a stay of execution; or
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(g) A material change shall occur in the business,
financial condition, assets or affairs of the Maker which in the Payees'
reasonable opinion materially increases its risk hereunder; or
(h) The Merger Agreement or any other document or
instrument delivered to the Payees pursuant to the terms and provisions of the
Merger Agreement, shall cease, for any reason to be in full force and effect; or
(i) The Maker shall dissolve or liquidate.
In case an Event of Default shall happen and be continuing,
the holder of this Note may declare the entire outstanding principal of this
Note, and all accrued, unpaid interest thereon, to be due and payable
immediately, and upon any such declaration such principal and interest shall
become and be immediately due and payable without further action. Upon and after
the occurrence of such an Event of Default and during the continuation thereof,
the outstanding principal balance hereof shall bear interest at a fluctuating
rate (the "Default Rate") equal to the lesser of (i) the Prime Rate, as
published in The Wall Street Journal, plus five percent (5%), or (ii) the
highest rate permitted by applicable law. Such provision for the payment of
interest at the Default Rate shall be in addition to, and not in limitation of,
the Payees' other remedies provided hereunder or under the Merger Agreement.
The Payees and the Maker hereby expressly acknowledge and
agree that all amounts owed to the Payees, or any of them, hereunder by the
Maker, AM Communications, Inc., and/or AM Broadband Services, Inc.
(collectively, the "AM Parties") are subordinated as to payment and time of
payment, in all respects, to all amounts owed under any Obligation (as such term
is defined in the Subordination Agreement) owed by any AM Party to LaSalle
Business Credit, Inc., as agent for Standard Federal Bank National Association.
This Note may not be amended, restated or otherwise modified in any respect
without the prior written consent of LaSalle Business Credit, Inc., as agent for
Standard Federal Bank National Association.
The Maker will, upon demand, reimburse the Payees for all
expenses, including, without limitation, the fees and expenses of the Payees'
counsel, incurred by the Payees in connection with the administration,
amendment, modification or enforcement of this Note, including, without
limitation, all attorney's fees and costs incurred by the Payees in connection
with the cost of collecting and satisfying any judgment that may be recovered by
the Payees. The Maker agrees that the provisions of this Note and the Merger
Agreement shall not merge into any judgment entered or recovered by the Payees
against the Maker and that notwithstanding the recovery or entry of any judgment
against the Maker, all of the terms, provisions, covenants, undertakings and
agreements of the Maker under this Note and the Merger Agreement shall remain in
full force and effect and shall be enforceable strictly in accordance with their
terms as fully as though no such judgment had been entered or recovered against
any Maker.
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No failure on the part of the Payees to exercise, and no delay
in exercising, any right under this Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right under any thereof preclude any
other or future exercise thereof or the exercise of any other right. The
remedies provided in this Note and the Merger Agreement are cumulative and not
exclusive of any remedies provided by law.
The Maker expressly waives presentment for payment, demand,
notice of dishonor, notice of protest, protest or any other notice whatsoever.
The Maker hereby irrevocably and unconditionally agrees that
any suit, action, or other legal proceeding arising out of or in connection with
this Note shall be brought in the courts of record of the Commonwealth of
Pennsylvania or the courts of the United States located in said state, consents
to the jurisdiction of each such court in any such suit, action or proceeding,
and waives any objection to the venue of any such suit, action, or proceeding in
any of such courts.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Maker has caused this Note to be
executed and delivered as of the date first above written.
AM NEX-LINK COMMUNICATIONS, INC
By:___________________________________
Name:_________________________________
Title:________________________________
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