Exhibit 10.13
The obligations under this Secured Promissory Note shall arise on the Conversion
Date (as defined in the Amended and Restated Stock Purchase Agreement dated
April 3, 2003 between the Corporation and Proyecciones y Ventas Organizadas,
S.S. de C.V., Xxxxxxx Xxxxxxxx del Rio Xxxxxxx and Xxxxxxx Xxxxxxxx del Rio
Arrangoiz (the "Agreement") and only if the Series C Preferred Stock (as defined
in the Certificate of Designation of Series C convertible preferred stock of the
Company (the "Designation")) is not converted into Common Stock of the Company
in accordance with the Designation.
SECURED PROMISSORY NOTE
$20,000,000 New York, NY
April 3, 2003
FOR VALUE RECEIVED, Frontline Communications, Corp., a Delaware corporation
(the "Borrower") promises to pay to Xxxxxxx Xxxxxxxx del Rio Arrangoiz
("Arrangoiz" or the "Lender"), as agent for the Sellers under that certain
Amended and Restated Stock Purchase Agreement, dated as of April 3, 2003 (the
"Stock Purchase Agreement"), among Borrower, Proyecciones y Ventas Organizadas,
S.A. de C.V. ("Provo"), Arrangoiz and Xxxxxxx Xxxxxxxx del Rio Xxxxxxx
("Requejo" and together with Arrangoiz, the "Sellers"), or ORDER, the principal
sum of Twenty Million and 00/100 Dollars ($20,000,000), in lawful money of the
United States of America, with interest thereon, to be computed on each advance
from the date of its disbursement, at the rate of 8% per annum.
IT IS HEREBY EXPRESSLY AGREED that the entire principal sum from time to
time outstanding hereunder and all accrued and unpaid interest thereon shall
become due and payable, within fifteen (15) days of the Conversion Date and only
if the Series C Preferred Stock is not converted into Common Stock of the
Company in accordance with the Designation. (the "Due Date").
If any amount payable by the Borrower hereunder is not paid on the date
when due (whether at maturity, by acceleration or otherwise) interest shall
accrue on such amount ("Late Payment"), to the extent permitted by applicable
law, during the period from and including the Due Date thereof to but excluding
the date such amount is paid at the rate of 12% per annum. Interest accruing on
Late Payments shall be payable from time to time on demand by the holder of this
Note. Principal and interest shall be payable at the office of Arrangoiz in
Mexico City, Mexico, or at such other place as the holder may from time to time
designate in writing.
This Note is being issued pursuant to the Stock Purchase Agreement and the
Certificate of Designation and is secured by the Security Agreement referred to
therein.
This Note may be prepaid at any time, and from time to time, in whole or in
part, without any premium or penalty therefor; provided, however, that all such
prepayments shall be applied first toward interest accrued on this Note and then
toward the outstanding principal balance.
The Borrower (i) waives diligence, demand, presentment, protest and notice
of any kind, (ii) agrees that it will not be necessary for the holder to first
institute suit in order to enforce payment of this Note (iii) consents to any
one or more extensions or postponements of time of payment, forbearance,
forgiveness or other indulgence, without notice or consent and (iv) consents
that the Lender may release or surrender, exchange or substitute any collateral
security now held or which may hereafter be held as security for the payment of
this Note. The pleading of any statute of limitations as a defense to any demand
against the undersigned is expressly hereby waived by the undersigned. The
holder shall have the right, but not the obligation, to set off against this
Note any and all amounts owing at any time by the undersigned to the holder.
The holder shall not be required to resort to any means of collection for
payment of any amounts evidenced by this Note, but may proceed directly against
the Borrower in such manner as the holder may choose. None of the rights of the
holder shall be waived or diminished by any failure or delay in the exercise
thereof.
This Note shall have the effect of an instrument executed under seal and
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the choice or conflict of laws provisions
thereof that would give rise to the application of the domestic substantive law
of any other jurisdiction.
The Borrower irrevocably consents and submits to the non-exclusive
jurisdiction of the courts of the State of New York, and waives any objection
based on venue or forum non conveniens with respect to any action instituted
therein arising under this Note or in any way connected with or related or
incidental to the dealings of the Borrower, Provo and Sellers in respect of this
Note or the transactions related hereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and
agrees that any dispute arising out of the relationship among the Borrower,
Provo and Sellers or the conduct of such persons in connection with this Note
shall be heard only in the courts described above (except that the holder shall
have the right to bring any action or proceeding against the Borrower or its
property in the courts of any jurisdiction which the holder deems necessary to
appropriate in order to enforce its rights against the Borrower or its
property).
The Borrower hereby waives personal service of any and all process on it
and consents that all such service of process may be made by registered or
certified mail (return receipt requested and postage prepaid) directed to it,
and service so made shall be deemed to be completed five (5) calendar days after
the same shall have been deposited in the U.S. mails, or, at the holder's
option, by service upon the undersigned in any other manner provided under
applicable law.
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All notices, request, demands and other communications that are required or
may be given hereunder (collectively, "Notices") shall be in writing and shall
be sent by registered or certified mail (return receipt requested and postage
prepaid) to the Borrower and Arrangoiz at the following respective addresses or
at such other address as shall be specified by like Notice: (i) if to the
Borrower, to Frontline Communications Corp., Xxx Xxxx Xxxx Xxxxx, 0xx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxx-Xxxxxxxx; and (ii) if to
the Lender, to Xxxxxxxx Roo Xx. 00, Xxx. Xxxx Xxx, 00000 Xxxxxx, D.F., Mexico,
Attention: Xxxxxxx Xxxxxxxx del Rio Arrangoiz. Notices shall be deemed given on
the third business day following the day sent, whether or not such Notice was
actually received on such day.
All agreements between the Borrower and the Lender are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness or otherwise, shall the amount paid
or agreed to be paid for the use or forbearance of the indebtedness evidenced
hereby exceed the maximum amount which is permitted to receive under applicable
law. If, from any circumstances whatsoever, fulfillment of any provision hereof
or of the Stock Purchase Agreement, at the time performance of such provision
shall be due, shall involve exceeding such amount, then the obligation to be
fulfilled shall automatically be reduced to the limit of such validity and if,
from any circumstances the Lender should ever receive as interest an amount
which would exceed such maximum amount, such amount which is excessive interest
shall be applied to the reduction of the principal balance evidenced hereby and
not to the payment of interest. As used herein, the term "applicable law" shall
mean the law which results in a higher permissible rate of interest, then this
Note shall be governed by such new law as of its effective date. This provision
shall control every other provision of all agreements between the Borrower and
the Lender.
If this Note shall not be paid when due and shall be placed by the holder
hereof in the hands of an attorney for collection, through legal proceedings or
otherwise, the Borrower will pay reasonable attorneys' fees to the holder
hereof; together with reasonable costs and expenses of collection, including,
without limitation, any such attorneys' fees, costs and expenses relating to any
proceedings with respect to the bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation of the Borrower or any party to
any instrument or agreement securing this Note, all is provided in the Stock
Purchase Agreement.
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED ON THIS NOTE OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR OUT OF ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY
PERSON. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER TO ACCEPT
THIS NOTE AND TO MAKE LOANS AS CONTEMPLATED HEREBY.
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This Note shall be binding on the successors and assigns of the Borrower
and inure to the benefit of the Lender and any other holder of this Note.
Whenever used herein, the term the Borrower shall be deemed to include its
successors and assigns and the term "Arrangoiz" shall be deemed to include the
Sellers and their respective successors and assigns. 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 be in no way affected thereby.
Frontline Communications Corp.
By: /s/ Xxxxxxx X. Xxxx-Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxx-Xxxxxxxx
Chief Executive Officer
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