THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
XXXXXXXX COACH, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED NOTE
FOR VALUE RECEIVED, THE XXXXXXXX COACH, INC., a Delaware corporation
(hereinafter called "Borrower"), hereby promises to pay to LONGVIEW
INTERNATIONAL EQUITY FUND, LP, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxxxxxxx, XX 00000, Fax: 000-000-0000, (the "Holder") or order, without
demand, the sum of One Hundred and Twenty-Five Thousand Dollars ($125,000.00),
with simple interest accruing at the annual rate of twelve percent (12%), on
October 21, 2005 (the "Maturity Date").
This Note has been entered into pursuant to the terms of a subscription
agreement between the Borrower and the Holder, dated of even date herewith
(the "Subscription Agreement"), and shall be governed by the terms of such
Subscription Agreement. Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set
forth in the Subscription Agreement. The following terms shall apply to this
Note:
ARTICLE I
GENERAL PROVISIONS
1.1 Payment Grace Period. The Borrower shall have a five (5) business
day grace period to pay any monetary amounts due under this Note, after which
grace period a default interest rate of twenty percent (20%) per annum shall
apply to the amounts owed hereunder.
1.2 Repayment. The Note shall be payable in full on the Maturity
Date; provided, that if an Event of Default has occurred (whether or not such
Event of Default is continuing), the Borrower may not pay this Note without
the consent of the Holder until the later of the Maturity Date or until one
year after the Event of Default has been cured.
1.3 Interest Rate. Simple interest payable on this Note shall accrue
at the annual rate of twelve percent (12%) and be payable quarterly commencing
April 1, 2005, and on the Maturity Date, accelerated or otherwise, when the
principal and remaining accrued but unpaid interest shall be due and payable,
or sooner as described below.
1.4 Acceleration of Maturity Date. The Maturity Date shall be
accelerated to the date the Borrower receives proceeds from the sale by the
Company to the United States government of a Command Post Vehicle under
purchase order number DGSP1003177 to be delivered to the Maryland Department
of State Police. This Note must be repaid out of the proceeds of such
financing transaction.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
XXXXXXXX COACH, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
NOTE
FOR VALUE RECEIVED, THE XXXXXXXX COACH, INC., a Delaware corporation
(hereinafter called "Borrower"), hereby promises to pay to LONGVIEW EQUITY
FUND, LP, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Fax:
000-000-0000, (the "Holder") or order, without demand, the sum of Three
Hundred and Seventy-Five Thousand Dollars ($375,000.00), with simple interest
accruing at the annual rate of twelve percent (12%), on October 21, 2005 (the
"Maturity Date").
This Note has been entered into pursuant to the terms of a subscription
agreement between the Borrower and the Holder, dated of even date herewith
(the "Subscription Agreement"), and shall be governed by the terms of such
Subscription Agreement. Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set
forth in the Subscription Agreement. The following terms shall apply to this
Note:
ARTICLE I
GENERAL PROVISIONS
1.1 Payment Grace Period. The Borrower shall have a five (5) business
day grace period to pay any monetary amounts due under this Note, after which
grace period a default interest rate of twenty percent (20%) per annum shall
apply to the amounts owed hereunder.
1.2 Repayment. The Note shall be payable in full on the Maturity
Date; provided, that if an Event of Default has occurred (whether or not such
Event of Default is continuing), the Borrower may not pay this Note without
the consent of the Holder until the later of the Maturity Date or until one
year after the Event of Default has been cured.
1.3 Interest Rate. Simple interest payable on this Note shall accrue
at the annual rate of twelve percent (12%) and be payable quarterly commencing
April 1, 2005, and on the Maturity Date, accelerated or otherwise, when the
principal and remaining accrued but unpaid interest shall be due and payable,
or sooner as described below.
1.4 Acceleration of Maturity Date. The Maturity Date shall be
accelerated to the date the Borrower receives proceeds from the sale by the
Company to the United States government of a Command Post Vehicle under
purchase order number DGSP1003177 to be delivered to the Maryland Department
of State Police. This Note must be repaid out of the proceeds of such
financing transaction.
ARTICLE II
EVENT OF DEFAULT
The occurrence of any of the following events of default ("Event
of Default") shall, at the option of the Holder hereof, make all sums of
principal and interest then remaining unpaid hereon and all other amounts
payable hereunder immediately due and payable, upon demand, without
presentment, or grace period, all of which hereby are expressly waived, except
as set forth below:
2.1 Failure to Pay Principal or Interest. The Borrower fails to
pay any installment of principal, interest or other sum due under this Note
when due and such failure continues for a period of five (5) business days
after the due date. The five (5) business day period described in this
Section 2.1 is the same five (5) business day period described in Section 1.1
hereof.
2.2 Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of the Subscription Agreement or this Note
in any material respect and such breach, if subject to cure, continues for a
period of ten (10) business days after written notice to the Borrower from the
Holder.
2.3 Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Subscription
Agreement, or in any agreement, statement or certificate given in writing
pursuant hereto or in connection therewith shall be false or misleading in any
material respect as of the date made and a Closing Date.
2.4 Receiver or Trustee. The Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business; or such a receiver or trustee shall otherwise be appointed.
2.5 Judgments. Any money judgment, writ or similar final
process shall be entered or filed against Borrower or any of its property or
other assets for more than $50,000, and shall remain unvacated, unbonded or
unstayed for a period of forty-five (45) days.
2.6 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy
law or any law, or the issuance of any notice in relation to such event, for
the relief of debtors shall be instituted by or against the Borrower and if
instituted against Borrower are not dismissed within 45 days of initiation.
2.7 Delisting. Delisting of the Common Stock from the OTC
Bulletin Board ("Bulletin Board") or such other principal exchange on which
the Common Stock is listed for trading; failure to comply with the
requirements for continued listing on the Bulletin Board for a period of three
(3) consecutive trading days; or notification from the Bulletin Board or any
Principal Market that the Borrower is not in compliance with the conditions
for such continued listing on the Bulletin Board or other Principal Market.
2.8 Stop Trade. An SEC or judicial stop trade order or
Principal Market trading suspension that lasts for five or more consecutive
trading days.
2.9 Non-Registration Event. The occurrence of a Non-Registration
Event as described in the Subscription Agreement.
2.10 Cross Default. A default by the Borrower of a material
term, covenant, warranty or undertaking of any other agreement to which the
Borrower and Holder are parties, or the occurrence of a material event of
default under any such other agreement which is not cured after any required
notice and/or cure period.
ARTICLE III
SECURITY INTEREST
3. Security Interest/Waiver of Automatic Stay. This Note is
secured by a security interest granted to the Collateral Agent for the benefit
of the Holder pursuant to a Security Agreement, as delivered by Borrower to
Holder. The Borrower acknowledges and agrees that should a proceeding under
any bankruptcy or insolvency law be commenced by or against the Borrower, or
if any of the Collateral (as defined in the Security Agreement) should become
the subject of any bankruptcy or insolvency proceeding, then the Holder should
be entitled to, among other relief to which the Holder may be entitled under
the Transaction Documents and any other agreement to which the Borrower and
Holder are parties (collectively, "Loan Documents") and/or applicable law, an
order from the court granting immediate relief from the automatic stay
pursuant to 11 U.S.C. Section 362 to permit the Holder to exercise all of its
rights and remedies pursuant to the Loan Documents and/or applicable law. THE
BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11
U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND
AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE
BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11
U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY
WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER
THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents to any
motion for relief from stay that may be filed by the Holder in any bankruptcy
or insolvency proceeding initiated by or against the Borrower and, further,
agrees not to file any opposition to any motion for relief from stay filed by
the Holder. The Borrower represents, acknowledges and agrees that this
provision is a specific and material aspect of the Loan Documents, and that
the Holder would not agree to the terms of the Loan Documents if this waiver
were not a part of this Note. The Borrower further represents, acknowledges
and agrees that this waiver is knowingly, intelligently and voluntarily made,
that neither the Holder nor any person acting on behalf of the Holder has made
any representations to induce this waiver, that the Borrower has been
represented (or has had the opportunity to he represented) in the signing of
this Note and the Loan Documents and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel.
ARTICLE IV
MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver. No failure or delay on
the part of Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
4.2 Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other
communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address
or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be: (i) if to the Borrower to: The Xxxxxxxx Coach, Inc., 00000 0xx
Xxxxxx X., Xxxxxxxxx, XX 00000, Attn: Xxxxx Xxxxxxxxx, CEO, telecopier: (763)
445-2918, with a copy by telecopier only to: Xxxxxx Xxxxxx, Esq., 000 0xx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, telecopier: 000-000-0000, and (ii) if to the
Holder, to the name, address and telecopy number set forth on the front page
of this Note, with a copy by telecopier only to Grushko & Xxxxxxx, P.C., 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, telecopier number: (212)
697-3575.
4.3 Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended
or supplemented.
4.4 Assignability. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to the benefit of the Holder
and its successors and assigns.
4.5 Cost of Collection. If default is made in the payment of
this Note, Borrower shall pay the Holder hereof reasonable costs of
collection, including reasonable attorneys' fees.
4.6 Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of New York. Any action brought by
either party against the other concerning the transactions contemplated by
this Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. Both parties and the
individual signing this Agreement on behalf of the Borrower agree to submit to
the jurisdiction of such courts. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs.
4.7 Maximum Payments. Nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate
of interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded
to the Borrower.
4.8 Redemption. This Note may not be redeemed or called without
the consent of the Holder.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be signed in its
name by an authorized officer as of the 21st day of January, 2005.
The Xxxxxxxx Coach, Inc.
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxx, CEO
WITNESS:
/s/ Xxxx Xxxxxxx
