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EXHIBIT 10.10
PROMISSORY NOTE
$180,000.00 July 1, 0000
Xxxxxxx, Xxxx Xxxxxxxx
Winners Entertainment, Inc. ("Winners" or "Maker") makes this
Promissory Note (the "Note") in accordance with the provisions of a Settlement
Agreement between Maker and Xxxxxxx Xxxxx entered as of June 30, 1995 (the
"Settlement Agreement"). This Note is made expressly subject to the relevant
provisions of the Settlement Agreement, including Sections 6 (Execution of
Promissory Note) and 10 (Right of Repurchase).
1. Promise to Pay. Makes promises to pay Xxxxxxx Xxxxx the principal
sum of $180,000.00 plus simple interest on the outstanding balance from July 1,
1995 until paid in full at the rate of 12% per annum. Payment may be made in
24 equal monthly installments, on the first day of each month, commencing
thirty (30) days after execution of this Note, or August 1, 1996, whichever is
first and so long as any event of default has not occurred and gone uncured.
All payments of principal and interest shall be made to Xxxxxxx Xxxxx c/o
Shallow Jewelers, 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxx 00000.
Maker may prepay, in cash or in kind in accordance with the terms hereof, all
or any part of the amount due hereon at any time, without penalty.
2. Event of Default; Notice and Cure. In the event Maker fails, for
any reason, to make a payment when due, such non-payment shall constitute an
Event of Default. If an Event of Default occurs, Maker shall have five
business days from the date of notice of such Event of Default to cure by
making full payment of the amount in default. Such payment shall constitute a
complete cure, as if the Event of Default never occurred. In the event Maker
fails to cure an Event of Default within the time set forth above, the entire
principal and any interest then accrued shall become immediately due and
payable.
3. Form of Payment; Payment in Kind. Xxxxx agrees to accept Maker's
corporate checks as good payment, subject to collection of good funds in due
course upon negotiating such checks.
So long as Maker is not in default with respect to its repayment
obligations under the Note, and there is no Event of Default that has gone
uncured, then upon either (i) registration of the Make-Up Shares and the
removal of all restrictive legends from the certificate(s) representing such
shares, or (ii) the Make-Up Shares are in fact eligible for public sale under
Rule 144 promulgated under the Act (scheduled for June 30, 1997), then Maker
shall receive as a credit against any amounts then due under the Note, whether
principal or interest, an amount equal to the average closing market price of
Maker's common stock for the ninety (90) trading days commencing on the
effective date of the registration statement, or commencing June 30, 1997, as
the case may be, multiplied by 120,000. During such ninety (90) day period, no
payments of principal or interest shall become due.
Other events, which are set forth in Section 10 of the Settlement
Agreement (Right of Repurchase), may reduce the amount due under this Note or
serve to cancel this Note in its entirety.
4. Fees and Costs. Maker agrees to pay all expenses, costs and fees,
including reasonable attorneys' fees, incurred by Xxxxx in endeavoring to
collect any amounts payable hereunder.
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5. Transfer. Any attempt to sell, transfer, assign, or hypothecate
this Note, whether by Xxxxx or any subsequent holder of this Note, shall be
invalid and ineffective unless such subsequent holder shall have provided
written acknowledgment in form and substance reasonably acceptable to Maker's
counsel that this Note is made in accordance with the provisions of a
Settlement Agreement between Maker and Xxxxxxx Xxxxx entered as of June 30,
1995 (the "Settlement Agreement") and further that this Note is made expressly
subject to certain provisions of the Settlement Agreement, including Sections 6
(Execution of Promissory Note) and 10 (Right of Repurchase).
6. Governing Law. This Note is made under and governed by the laws
of the State of Minnesota.
WINNERS ENTERTAINMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, President
