EXHIBIT 10.24
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
THIS INSTRUMENT MAY BE SUBJECT TO CERTAIN SUBORDINATION PROVISIONS, AS FROM TIME
TO TIME IN EFFECT, BY AND AMONG THE OBLIGOR HEREUNDER AND CERTAIN OTHER PARTIES
THERETO, WHICH, AMONG OTHER THINGS, SUBORDINATE THE OBLIGATIONS OF THE OBLIGOR
HEREUNDER TO THE PRIOR PAYMENT OF CERTAIN OBLIGATIONS OF THE OBLIGOR TO THE
HOLDERS OF SENIOR INDEBTEDNESS AS DEFINED THEREIN. IN ADDITION, THE RIGHTS OF
THE HOLDER HEREUNDER, INCLUDING THE RIGHT TO RECEIVE PAYMENT OF THE PRINCIPAL OF
AND INTEREST, IF ANY, ON THIS NOTE, ARE SUBJECT TO SET OFF IN ACCORDANCE WITH
SECTION 8.1(f) OF THE MEMBERSHIP SHARE PURCHASE AGREEMENT DATED AS OF MAY 14,
1999 BY AND AMONG THE COMPANY, ZEFER CORP. NORTHEAST, SPYPLANE LLC AND THE
EQUITYHOLDERS OF SPYPLANE LLC (THE "PURCHASE AGREEMENT").
NONNEGOTIABLE
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SUBORDINATED PROMISSORY NOTE
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FOR VALUE RECEIVED, the undersigned, ZEFER Corp., a Delaware corporation
(the "Company"), hereby promises to pay to ▇▇▇▇ ▇▇▇▇▇▇▇, the principal amount of
Four Hundred Ninety Thousand Dollars ($490,000) on May 14, 2001, together with
interest from the date hereof on the principal amount from time to time unpaid
at a rate which shall at all times equal eight percent (8%) per annum; provided,
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however, that said interest shall not accrue or be due or payable by the Company
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with respect to any amounts which the Company has properly set off pursuant to
Section 8.1(f) of the Purchase Agreement. The Company shall make annual
payments in the amount of 50% of the unpaid interest hereunder, such payments
being made in arrears commencing on May 14, 2000.
All payments to the holder hereof shall be made payable to ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
This Subordinated Promissory Note is nonnegotiable. This Subordinated
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Promissary Note may not be sold, hypothecated, pledged, assigned or otherwise
transferred without the prior written consent of the Company. On May 14, 2000,
the Company shall prepay $90,000 of the outstanding principal amount of this
Subordinated Promissory Note. Notwithstanding the foregoing sentence, the
Company may at any time or from time to time prepay all or any part of the
outstanding principal amount of this Subordinated Promissory Note, without
penalty or premium, together with all accrued and unpaid interest in respect
thereof accrued to the date of prepayment.
If any one or more of the following events (herein termed "Events of
Default") shall happen, that is to say:
(i) The Company shall fail to make any payment in respect of principal of
or interest on this Subordinated Promissory Note as the same shall become due,
whether by acceleration or otherwise, which failure shall continue for a period
of 15 days; or
(ii) The Company shall:
(A) commence a voluntary case under Title 11 of the United States Code
as from time to time in effect, or authorize the commencement of such
a voluntary case;
(B) have filed against it a petition commencing an involuntary case
under said Title 11 which shall not have been dismissed within 30 days
after the date on which such petition is filed;
(C) seek relief as a debtor under any applicable law, other than said
Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(D) have entered against it an order by a court of competent
jurisdiction (1) finding it to be bankrupt or insolvent, (2) ordering
or approving its liquidation, reorganization or any modification or
alteration of the rights of its creditors, or (3) assuming custody of,
or appointing a receiver or other custodian for all or a substantial
part of its property;
(E) make an assignment for the benefit of, or enter into a composition
with, its creditors, or appoint or consent to the appointment of a
receiver or other custodian for all or a substantial part of its
property; or
(F) sell all or substantially all of its assets or there shall be a
transfer of more than 51% of the Company's equity interests to an
entity not currently a holder of equity interests of the Company;
then and in each and every such case, subject to the terms of any subordination
agreement or provisions by and among the Company and the holder hereof, the
holder of this note may by notice in writing to the Company declare all or any
part of the unpaid balance of the principal of and interest on this Subordinated
Promissory Note then outstanding to be forthwith due and payable, and thereupon
such unpaid balance or part thereof shall become so due and payable without
presentation, protest or further demand or notice of any kind, all of which are
hereby expressly waived, and the holder of this note may proceed to enforce
payment of such balance or part thereof in such manner as the holder of this
note may elect.
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No failure by the holder to take action with respect to any Event of
Default shall affect its subsequent rights to take action with respect to the
same or any other Event of Default.
This Subordinated Promissory Note shall be governed by and construed in
accordance with the laws (other than the conflict of law rules) of The
Commonwealth of Massachusetts.
The Company and all endorsers and guarantors hereby waive presentment,
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Subordinated
Promissory Note, except as specifically otherwise provided in this Subordinated
Promissory Note, and assent to extensions of time of payment, or forbearance or
other indulgence without notice.
The holder of this Subordinated Promissory Note is hereby on notice that
the right to receive payment of the principal of or interest on this
Subordinated Promissory Note is subject to the Company's rights of set off in
accordance with Section 8.1(f) of the Purchase Agreement. Exercise of such
rights of set off by the Company under the Purchase Agreement shall not
constitute an event of default hereunder. In addition, the holder of this
Subordinated Promissory Note agrees that, upon the request of the Company, such
holder shall execute a subordination agreement requested by any senior lender of
the Company, which subordination agreement may provide, among other things, that
the indebtedness evidenced by this Subordinated Promissory Note and the payment
by the Company of the principal hereof and interest hereon shall be subordinate
to and junior in right of payment to the prior payment in full of all "Senior
Indebtedness" (or other equivalent term) as defined therein.
* * * * * *
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IN WITNESS WHEREOF, the undersigned has caused this Subordinated Promissory Note
to be executed by its duly authorized officer as of May 14, 1999.
ZEFER CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary
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