EXHIBIT 10.43
SUBORDINATED NOTE
$781,000.00 October 1, 1998
FOR VALUE RECEIVED, PARAVANT COMPUTER SYSTEMS, INC., a Florida
corporation (the "Maker"), promises to pay to the order of XXXXXX XXXXXXXX (the
"Payee"), in the manner hereinafter set forth, the principal sum of Seven
Hundred Eighty One Thousand Dollars ($781,000.00).
This Note is given as consideration by the Maker for the non-competition
agreement between the Payee and the Maker pursuant to that certain Acquisition
Agreement dated as of March 31, 1998 (the "Acquisition Agreement") between the
Maker, Engineering Development Laboratories, Incorporated, an Ohio corporation
("EDL"), Signal Technology Laboratories, Inc., an Ohio corporation ("STL") and
the shareholders of EDL and STL, including the Payee. Payments to be made under
this Note shall be made to the order of the Payee at 000 Xxxxxx Xxxxxxxxx,
Xxxxxx, Xxxx 00000, or at such other place as the Payee may designate to the
Maker in writing.
In addition to the aforementioned principal amount, the Maker shall pay
to the Payee interest on the unpaid principal amount from time to time
outstanding under this Note interest at the rate of eight percent (8%) per annum
determined on the basis of a three hundred and sixty five (365) day year.
This Note shall be payable in twelve (12) quarterly payments as follows:
(i) eleven (11) payments in the principal amount of Sixty Five Thousand Eighty
Three and 33/100 Dollars ($65,083.33) together with accrued interest on the
unpaid principal amount and (ii) one payment in the principal amount of Sixty
Five Thousand Eighty Three and 34/100 Dollars ($65,083.34) together with accrued
interest on the unpaid principal amount. The first such quarterly payment shall
be due and payable on April 1, 1999 and successive quarterly payments shall be
due and payable on July 1, 1999, October 1, 1999 and January 1, 2000 and on each
April 1, July 1, October 1 and January 1 thereafter until January 1, 2002, when
the entire principal sum and all accrued but unpaid interest, if not sooner paid
as aforesaid, shall be due and payable in full. In the event the Maker calls all
or any of its outstanding warrants for redemption, cancellation, exercise or
conversion, the Maker will be required to apply a portion of the proceeds
therefrom to reduce the indebtedness this Note as required, and subject to the
limitations set forth in, the Acquisition Agreement.
The Maker shall have the right to prepay this Note in whole or in part
at any time without penalty. The Maker shall also have the right to set-off
against any payment or payments due under this Note any amount or amounts due to
the Maker from the Payee as indemnification under the Acquisition Agreement or
as damages under the non-competition agreement or the employment agreement
between the Payee and the Maker dated as of the date of this Note and given as a
condition of the closing under the Acquisition Agreement. Any such prepayment or
set-off shall be applied first to accrued but unpaid interest, and then to the
principal sums next maturing hereunder.
All payments required hereby shall be made in lawful money of the United
States of America.
By acceptance of this Note the Payee has agreed that the right of the
holder of this Note to obtain payment from the Maker is subordinate to the
rights of National City Bank (the "Senior Creditor") in respect of any
indebtedness of the Maker for borrowed money payable to the Senior Creditor
("Senior Debt"). This Note shall not be subordinate to any other indebtedness of
the Maker.
Any failure of the Maker to make any payment required hereunder by not
later than ten (10) days after the same shall be due shall constitute an Event
of Default. Upon the occurrence of any Event of Default, the holder hereof shall
have the right, after written notice to the Maker of such Event of Default, and
the failure of the Maker to cure such Event of Default within thirty (30) days
after Maker's receipt of such notice, to declare a Default under this Note and
to accelerate all principal and interest due hereunder. Following the occurrence
of any Default, the holder hereof also shall have the right to exercise any
remedies that it may have hereunder. If it becomes necessary for the holder
hereof to enforce this Note, the Maker shall pay the holder any and all costs,
expenses and reasonable attorneys's and paralegals' fees and expenses incurred
by such holder in connection with such proceedings and any associated
administrative, appellate or bankruptcy proceedings. During any Default or any
period permitted for the curing of any Event of Default interest will continue
to accrue for the benefit of the Payee at the rate of eight percent (8%) per
annum determined as hereinbefore provided.
The Maker hereby waives presentment for payment, demand, protest, notice
of protest and notice of dishonor and expressly agrees to remain and continue
bound for the payment of the principal and interest provided for by the terms of
this Note, notwithstanding any extension or extensions of time of, or for the
payment of said principal or interest.
This Note shall be governed and construed in accordance with the laws of
the State of Florida. If any term or provision of this Note shall be held
invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.
IN WITNESS WHEREOF, the Maker has caused this Note to be executed under
seal and delivered by its duly authorized officer as of the date first above
written.
"MAKER"
PARAVANT COMPUTER SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Chairman of the Board
