CONVERTIBLE TERM NOTE
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$2,000,000
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February
21, 2007
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CONVERTIBLE
TERM NOTE
This
Note and the Common Stock issuable upon conversion hereof (until such time,
if
any, as such Common Stock is registered with the Securities and Exchange
Commission pursuant to an effective registration statement) have not been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities laws, and may not be sold, offered for sale of otherwise
transferred unless registered or qualified under the Act and applicable state
securities laws or unless the Maker receives an opinion, in form and from
counsel reasonably acceptable to the Maker, that registration, qualification
or
other such actions are not required under any such laws.
FOR
VALUE
RECEIVED, XXXXXXX INDUSTRIES, INC., a Delaware corporation (the “Maker”),
hereby promises to pay to the order of ComVest Capital, LLC, a Delaware limited
liability company (together with any subsequent holder hereof, the “Payee”),
the
sum of Two Million ($2,000,000) Dollars (the “Principal”),
with
interest thereon, on the terms and conditions set forth herein and in the
Revolving Credit and Term Loan Agreement of even date herewith by and between
the Maker and the Payee (as same may be amended, modified, supplemented and/or
restated from time to time, the “Loan
Agreement”).
Terms
defined in the Loan Agreement and not otherwise defined herein shall have
the
meanings assigned thereto in the Loan Agreement.
Payments
of principal of, interest on and any other amounts with respect to this
Convertible Promissory Note (this “Note”)
are to
be made in lawful money of the United States of America.
Principal
and accrued interest of this Note may or shall be convertible into common
stock
of the Maker as provided in Section 3 below.
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1.
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Payments.
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(a) Interest. This
Note shall bear
interest (“Interest”)
on
Principal amounts outstanding from time to time from the date hereof at the
rate
of ten (10%) percent per annum; provided,
however,
that
during the continuance of any Event of Default, the Interest rate hereunder
shall be increased to fourteen (14%) percent per annum. All Interest shall
be
computed on the daily unpaid Principal balance of this Note based on a three
hundred sixty (360) day year, and shall be payable monthly in arrears on
the
last day of each calendar month commencing March 31, 2007 and on the maturity
hereof.
(b) Principal. The
Principal of this
Note shall be payable in thirty (30) equal monthly installments of $66,666.67
each, due and payable on the last day of each calendar month commencing
September 30, 2007 and continuing through and including February 28,
2010.
(c) Non-Business
Day. If
any scheduled payment
date as aforesaid is not a business day in either the State of Florida or
the
State of Texas, then the payment to be made on such scheduled payment date
shall
be due and payable on the next succeeding business day, with additional interest
on any Principal amount so delayed for the period of such delay.
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2.
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Prepayment.
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(a) Optional
Prepayment of Principal. The
unpaid Principal
balance of this Note may, at the Maker’s option, be prepaid in whole or in part,
at any time or from time to time, upon fifteen (15) days’ prior written notice
to the Payee, provided that the Payee shall retain the right to convert all
or
any portion of such Principal amount called for prepayment, together with
any or
all Interest accrued thereon, at any time prior to the date fixed for
prepayment, and thereafter until such prepayment is actually made. Any optional
prepayment of Principal hereunder shall require the simultaneous payment
of a
prepayment premium as provided in Section 2.03(c) of the Loan
Agreement.
(b) Mandatory
Prepayment of Principal. The
Principal of this
Note may be required to be prepaid, in whole or in part, at any time and
from
time to time in accordance with Section 2.02(b) of the Loan
Agreement.
(c) Interest. Except
to the extent that
such Interest is converted as herein provided, each prepayment of Principal
shall be accompanied by all accrued Interest on the Principal amount prepaid
or
converted accrued to the date of prepayment or conversion.
1
(d) Application
of Payments. Any
and all prepayments
hereunder shall be applied first to any prepayment premium required under
Section 2(a) above, then to unpaid accrued Interest on the Principal amount
being prepaid, and finally to the remaining Principal installments in inverse
order of maturity.
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3.
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Conversion.
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(a) Optional
and Mandatory Conversion. The
Payee may, at its
option, upon written notice to the Maker given at any time and from time
to
time, convert all or any portion of the unpaid Principal balance of this
Note,
and/or any accrued Interest thereon, into shares of common stock of the Maker
(“Common
Stock”),
at a
price of Eighty ($.80) Cents per share of Common Stock (as same may be adjusted
from time to time in accordance herewith, the “Conversion
Price”).
In
addition, if (i) there is not then continuing any Default or Event of
Default under and as defined in the Loan Agreement, (ii) the Common Stock
is then traded or listed for trading on any national securities exchange
or the
NASDAQ National Market or NASDAQ Capital Market, (iii) there is then in
effect a valid registration statement under the Securities Act of 1933, as
amended, in respect of the Common Stock issued and issuable upon conversion
of
this Note and upon exercise of the Warrants issued pursuant to the Loan
Agreement, such that all such shares of Common Stock will be freely tradable
immediately upon issuance at such time, (iv) the Maker is current in all
of its
required filings with the Securities and Exchange Commission, (v) the reported
Trading Price (as hereinafter defined) of the Common Stock for each of the
twenty (20) consecutive trading days immediately prior thereto has been equal
to
or greater than 165% of the Conversion Price in effect on each such trading
day,
and (vi) the average daily trading volume of the Common Stock as reported
by the
principal exchange or trading medium on which the Common Stock is listed
or
quoted has been equal to or greater than 100,000 shares (such number to be
subject to adjustment on a proportionate basis in the event of each and every
stock split, stock dividend, combination of shares, recapitalization or other
such event respecting the Common Stock which may occur subsequent to the
date
hereof) during the three (3) months immediately prior thereto, then
the
Maker may, upon five (5) business days’ prior written notice to the Payee,
require the Payee to convert all or any portion of the Principal of this
Note
into shares of Common Stock at the Conversion Price then in effect; and in
the
event of any such conversion at the option of the Maker, the Maker shall
give
written notice thereof to the Payee certifying as to the satisfaction of
the
foregoing conditions (including a detailed schedule of Trading Prices and
volumes for purposes of the foregoing clauses (v) and (vi)), and shall pay
to
the Payee, simultaneously with the delivery of stock certificates in accordance
with Section 3(c), all unpaid accrued Interest on the Principal amount so
converted. As used herein, the term “Trading Price” on any relevant date means
the closing sale price (or, if no closing sale price is reported, the last
reported sale price) of the Common Stock (regular way). The effective date
of
any conversion hereunder is herein referred to as the “Conversion
Date.”
To
the
extent that this Note is converted only in part, then such conversion shall
be
treated as a prepayment of the Principal amount converted in accordance with
Section 2(d) above, provided that no prepayment premium shall be required
in
respect of any conversion.
(b) Mechanics
of Conversion. Upon
notice to the Maker of the Payee’s conversion election as provided in Section
3(a), or upon notice to the Payee of the Maker’s conversion election as provided
in Section 3(a), the Maker shall, in accordance with Section 3(c), issue
to the
Payee (or to the Payee’s designee(s) set forth in the Payee’s conversion
election, or in any direction given to the Maker in response to the Maker’s
conversion election) the number of shares of Common Stock to which the Payee
shall be entitled upon such conversion, and shall deliver or cause to be
delivered to the Payee or such designee(s) the certificates representing
such
shares of Common Stock. All shares of Common Stock issued or delivered upon
any
conversion hereunder shall, when issued or delivered, be duly authorized,
validly issued, fully paid and nonassessable. In lieu of any fractional shares
to which the Payee would otherwise be entitled, the Maker shall pay cash
equal
to such fraction multiplied by the per share Conversion Price.
(c) Issuance
of Common Stock Upon Conversion. Within
a reasonable time,
not exceeding five (5) Business Days after the Conversion Date, the Maker
shall
deliver or cause to be delivered, to or upon the written order of the Payee
of
this Note so converted, certificates representing the number of fully paid
and
nonassessable shares of Common Stock into which this Note has been converted
in
accordance with the provisions of this Section 3. If so requested by the
Maker,
the Payee shall, within a reasonable time (not exceeding five (5) Business
Days
after receipt by the Payee of such certificates), surrender this Note to
the
Maker for cancellation, against delivery of a replacement Note representing
the
remaining balance (if any) of this Note which has not been converted. Subject
to
the following provisions of this Section 3, such conversion shall be deemed
to
have occurred on the Conversion Date, so that the Payee of this Note or such
Payee’s designee(s) shall be treated for all purposes as having become the
record Payee of such shares of Common Stock at such time.
(d) Taxes
on Conversion. The
issuance of certificates for shares for Common Stock upon the conversion
of this
Note shall be made without charge by the Maker to the converting Payee for
any
tax in respect of the issuance of such certificates and such certificates
shall
be issued in the name of, or in such names as may be directed by, the Payee
of
this Note; provided,
however,
that
the Maker shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance or delivery of any such certificate
in
a name other than that of the Payee of this Note, and the Maker shall not
be
required to issue or deliver such certificates unless or until the person
or
persons requesting the issuance thereof shall have paid to the Maker the
amount
of any such tax or shall have established to the satisfaction of the Maker
that
any such tax has been paid.
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(e)
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Adjustment
of Shares
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(i) Stock
Dividends, Distributions or Subdivisions. In
the event that, at any
time and from time to time from and after the date of this Note, the Maker
shall
issue additional shares of Common Stock (or securities convertible into Common
Stock) in a stock dividend, stock distribution or subdivision paid with respect
to Common Stock, or declare any dividend or other distribution payable in
additional shares of Common Stock (or securities convertible into Common
Stock)
or effect a split or subdivision of the outstanding shares of Common Stock,
then, concurrently with the effectiveness of such stock dividend, stock
distribution or subdivision, the then-effective Conversion Price shall be
proportionately decreased, and the number of shares of Common Stock issuable
upon conversion of this Note shall thus be proportionately increased.
(ii) Combinations
or Consolidations. In
the event that, at any
time and from time to time from and after the date of this Note, the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification
or
otherwise, into a lesser number of shares of Common Stock, then, concurrently
with the effectiveness of such combination or consolidation, the then-effective
Conversion Price shall be proportionately increased, and the number of shares
of
Common Stock issuable upon conversion of this Note shall thus be proportionately
decreased.
(iii) Other
Dividends or Distributions. If
the Maker, at any time
or from time to time after the issuance of this Note, makes a distribution
to
the holders of Common Stock which is payable in securities of the Maker other
than Common Stock, then, in each such event, provision shall be made so that
the
Payee shall receive upon conversion of this Note, in addition to the number
of
shares of Common Stock, the amount of such securities of the Maker which
would
have been received if the portion of this Note so converted had been exercised
for Common Stock on the date of such event, subject to adjustments subsequent
to
the date of such event with respect to such distributed securities which
shall
be on terms as nearly equivalent as practicable to the adjustments provided
in
this Section 3(e)(iii) and all other adjustments under this
Section 3(e). Nothing contained in this Section 3(e)(iii) shall be deemed
to permit the payment of any distribution in violation of the Loan
Agreement.
(iv) Merger,
Consolidation or Exchange. If,
at any time or from
time to time after the date of this Note, there occurs any merger,
consolidation, arrangement or statutory share exchange of the Maker with
or into
any other person or entity, then, in each such event, provision shall be
made so
that the Payee shall receive upon conversion of this Note the kind and amount
of
shares and other securities and property (including cash) which would have
been
received upon such merger, consolidation, arrangement or statutory share
exchange by the Payee if the portion of this Note so converted had been
exercised for shares of Common Stock immediately prior to such merger,
consolidation, arrangement or statutory share exchange, subject to adjustments
for events subsequent to the effective date of such merger, consolidation,
arrangement or statutory share exchange with respect to such shares and other
securities which shall be on terms as nearly equivalent as practicable to
the
adjustments provided in this Section 3(e)(iv) and all other adjustments
under this Section 3(e). Nothing contained in this Section 3(e)(iv) shall
be deemed to permit any such transaction in violation of the Loan
Agreement.
(v) Recapitalization
or Reclassification. If,
at any time or from
time to time after the date of this Note, the shares of Common Stock issuable
upon conversion of this Note are changed into the same or a different number
of
securities of any class of the Maker, whether by recapitalization,
reclassification or otherwise (other than a merger, consolidation, arrangement
or statutory share exchange provided for elsewhere in this Section 3(e)),
then, in each such event, provision shall be made so that the Payee shall
receive upon conversion of this Note the kind and amount of securities or
other
property which would have been received in connection with such
recapitalization, reclassification or other change by the Payee if the portion
of this Note so converted had been converted immediately prior to such
recapitalization, reclassification or change, subject to adjustments for
events
subsequent to the effective date of such recapitalization, reclassification
or
other change with respect to such securities which shall be on terms as nearly
equivalent as practicable to the adjustments provided in this
Section 3(e)(v) and all other adjustments under this
Section 3(e).
(vi) Extraordinary
Dividends or Distributions. If,
at any time or from
time to time after the date of this Note, the Maker shall declare a dividend
or
any other distribution upon the Common Stock payable otherwise than out of
current earnings, retained earnings or earned surplus and otherwise than
in
shares of Common Stock, then the Conversion Price in effect immediately prior
to
such declaration shall be reduced by an amount equal, in the case of a dividend
or distribution in cash, to the amount thereof payable per share of Common
Stock
or, in the case of any other dividend or distribution, to the value thereof
per
share of Common Stock at the time such dividend or distribution was declared,
as
determined by the Board of Directors of the Maker in good faith. Such reductions
shall take effect as of the date on which a record is taken for the purposes
of
the subject dividend or distribution, or, if a record is not taken, the date
as
of which the holders of record of Common Stock entitled to such dividend
or
distribution are to be determined. Nothing contained in this Section 3(e)(vi)
shall be deemed to permit the payment of any dividend in violation of the
Loan
Agreement.
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(vii) Dilutive
Issuances. (A)
If the Maker, at any
time or from time to time, issues or sells any Additional Shares of Common
Stock
(as defined below), other than as provided in the foregoing subsections of
this
Section 3(e), for a price per share (which, in the case of options,
warrants, convertible securities or other rights, includes the amounts paid
therefor plus the exercise price, conversion price or other such amounts
payable
thereunder) that is less than the
Conversion Price then in effect, then and in each such case, the then applicable
Conversion Price shall automatically be reduced as of the opening of business
on
the date of such issue or sale, to a price determined by multiplying the
Conversion Price then in effect by a fraction (i) the numerator of which
shall be (A) the number of share of Common Stock deemed outstanding (as
determined below) immediately prior to such issue or sale, plus (B) the
number of shares of Common Stock which the aggregate consideration received
by
the Maker for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price, and (ii) the denominator of which
shall be the number of shares of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale plus the total number of
Additional Shares of Common Stock so issued; provided,
however,
that
upon the expiration or other termination of options, warrants or other rights
to
purchase or acquire Common Stock which triggered any adjustment under this
Section 3(e)(vii), and upon the expiration or termination of the right to
convert or exchange convertible or exchangeable securities (whether by reason
of
redemption or otherwise) which triggered any adjustment under this Section
3(e)(vii), if any thereof shall not have been exercised, converted or exchanged,
as applicable, the number of shares of Common Stock deemed to be outstanding
pursuant to this Section 3(e)(vii) shall be reduced by the number of shares
as to which options, warrants and rights to purchase or acquire Common Stock
shall have expired or terminated unexercised, and as to which conversion
or
exchange rights shall have expired or terminated unexercised, and such number
of
shares shall no longer be deemed to be outstanding; and the Conversion Price
then in effect shall forthwith be readjusted and thereafter be the price
that it
would have been had adjustment been made on the basis of the issuance only
of
the shares of Common Stock actually issued. For purposes of the preceding
sentence, the number of shares of Common Stock deemed to be outstanding as
of a
given date shall be the sum of (x) the number of shares of Common Stock
actually outstanding, (y) the number of shares of Common Stock into which
this Note could be converted on the day immediately preceding the given date,
and (z) the number of shares of Common Stock which could be obtained
through the exercise or conversion of all other rights, options and convertible
securities outstanding on the day immediately preceding the given date.
“Additional
Shares of Common Stock”
shall
mean all shares of Common Stock, and all options, warrants, convertible
securities or other rights to purchase or acquire Common Stock, issued by
the
Maker other than (i) shares of Common Stock issued pursuant to the exercise
of options, warrants or convertible securities outstanding on the date hereof
(including, without limitation, all of the Warrants issued pursuant to the
Loan
Agreement), or hereafter issued from time to time pursuant to and in accordance
with stock purchase or stock option plans as in effect on the date hereof,
and
(ii) shares of Common Stock and/or options, warrants or other Common Stock
purchase rights for up to an aggregate of 900,000 shares of Common Stock
(such
number to be subject to adjustment in accordance with Sections 3(e)(i) and
3(e)(ii) above), where such options, warrants or other rights are issued
both
(x) with exercise prices per share of Common Stock at the then-current fair
market value of a share of Common Stock, as determined in good faith by the
Board of Directors of the Maker or the Compensation Committee thereof, and
(B)
to employees, officers or directors of, or consultants to, the Maker or any
Subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Maker’s Board of Directors or the
Compensation Committee thereof, and by the Maker’s stockholders.
(B) In
the
event that the exercise price, conversion price, purchase price or other
price
at which shares of Common Stock are purchasable pursuant to any options,
warrants, convertible securities or other rights to purchase or acquire Common
Stock is reduced at any time or from time to time (other than under or by
reason
of provisions designed to protect against dilution), then, upon such reduction
becoming effective, the Conversion Price then in effect hereunder shall
forthwith be decreased to such Conversion Price as would have been obtained
had
the adjustments made and required under this Section 3(e)(vii) upon the issuance
of such options, warrants, convertible securities or other rights been made
upon
the basis of (and the total consideration received therefor) (i) the issuance
of
the number of shares of Common Stock theretofore actually delivered upon
the
exercise, conversion or exchange of such options, warrants, convertible
securities or other rights, (ii) the issuance of all of the Common Stock
and all
other options, warrants, convertible securities and other rights to purchase
or
acquire Common Stock issued after the issuance of the modified options,
warrants, convertible securities or other rights, and (iii) the original
issuance at the time of the reduction of any such options, warrants, convertible
securities or other rights then still outstanding.
(C) In
no
event shall an adjustment under this Section 3(e)(vii) be made if it would
result in an increase in the then applicable Conversion Price.
(viii)
Certificate
of Adjustment. Whenever
the Conversion
Price and/or the number of share of Common Stock receivable upon conversion
of
this Note is adjusted, the Maker shall promptly deliver to the Payee a
certificate of adjustment, setting forth the Conversion Price and/or shares
of
Common Stock issuable after adjustment, a brief statement of the facts requiring
the adjustment and the computation by which the adjustment was made. The
certificate of adjustment shall be prima facie evidence of the correctness
of
the adjustment.
(ix) Successive
Application. The
provisions of this
Section 3(e) shall be applicable successively to each event described herein
which may occur subsequent to the date of this Note and prior to the conversion
in full of this Note.
(x) Fractional
Shares. No
fractional shares of
Common Stock shall be issuable by reason of any adjustments made pursuant
to
this Section 3(e); and in lieu of any such fractional shares, the Maker shall
pay cash therefor in accordance with Section 3(b) above.
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(f) No
Impairment. The
Maker will not, by
amendment of its incorporation documents or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities
or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder but will at all
times
in good faith assist in the carrying out of all the provisions of this Section
3
and in the taking of all such action as may be necessary or appropriate in
order
to protect the conversion rights of the Payee of this Note against impairment.
In the event of any merger or consolidation in which the Maker is not the
surviving entity, the Maker shall make appropriate arrangements in order
that,
upon any subsequent conversion of this Note, the Payee shall become entitled
to
receive the same securities or other consideration that such Payee would
have
received had such conversion been made immediately prior to the consummation
of
such merger or consolidation, subject to further adjustments, of the type
provided in this Note, with respect to any events relating to any such
securities occurring subsequent to the consummation of such merger or
consolidation.
(g) Common
Stock Reserved. The
Maker
shall at all times reserve and keep available out of its authorized but unissued
Common Stock such number of shares of Common Stock as shall from time to
time be
sufficient to effect the full conversion of this Note into Common Stock.
(h) Restricted
Securities. The
shares of Common Stock issuable to the Payee hereunder (the “Shares”)
may
not, at the time of issuance, have been registered under any federal or state
securities laws, and may constitute “restricted securities” within the meaning
of federal and state securities laws. By its receipt of Shares, if the Shares
are not then the subject of an effective registration statement under the
Securities Act, the Payee will be deemed to acknowledge and confirm that
it is
receiving such Shares for its own account for investment, and not with a
view to
the resale or distribution thereof in violation of any federal or state
securities laws.
4. Events
of Default. The
occurrence and continuance of an Event of Default under the Loan Agreement
shall
constitute a default under this Note and shall entitle the Payee to accelerate
the entire indebtedness hereunder and take such other action as may be provided
for in the Loan Agreement and/or in any and all other instruments evidencing
and/or securing the indebtedness under this Note, or as may be provided under
the law.
5. Communications
and Notices. Except
as
otherwise specifically provided herein, all communications and notices provided
for in this Note shall be sent by post-paid first class mail, reputable
overnight courier or facsimile to the Payee at the Payee’s address as provided
to the Secretary of the Maker from time to time and, if to the Maker, at
00000
Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxxx
X.
Xxxxx, Executive Vice President and Secretary. Any first-class mail notice
provided pursuant to this Section 5 shall be deemed given three (3) Business
Days after being sent by first-class mail. Any notice sent by overnight courier
shall be deemed given on the next Business Day after being deposited with
the
courier with all charges prepaid or billed to the account of the sender.
Notices
sent by facsimile shall be deemed received upon delivery. The Maker and the
Payee may from time to time change their respective addresses, for purposes
of
this Section 5, by written notice to the other parties; provided, however,
that
notice of such change shall be effective only upon receipt.
6. Governing
Law. This
Note
shall be construed in accordance with and governed by the
laws
of the State of New York, except to the extent superseded by Federal
enactments.
7. Assignment. This
Note
shall be binding upon and shall inure to the benefit of the respective
successors and permitted assigns of the parties hereto, provided that the
Maker
may not assign any of its rights or obligations hereunder without the prior
written consent of the Payee.
8. Waiver
and Amendment. No
waiver of a right in
any instance shall constitute a continuing waiver of successive rights, and
any
one waiver shall govern only the particular matters waived. Neither any
provision of this Note nor any performance hereunder may be amended or waived
except pursuant to an agreement in writing signed by the party against whom
enforcement thereof is sought. Except as otherwise expressly provided in
this
Note, the Maker hereby waives diligence, demand, presentment for payment,
protest, dishonor, nonpayment, default, notice of any and all of the foregoing,
and any other notice or action otherwise required to be given or taken under
the
law in connection with the delivery, acceptance, performance, default,
enforcement or collection of this Note, and expressly agrees that this Note,
or
any payment hereunder, may be extended, modified or subordinated (by forbearance
or otherwise) from time to time, without in any way affecting the liability
of
the Maker. The Maker further waives the benefit of any exemption under the
homestead exemption laws, if any, or any other exemption, appraisal or
insolvency laws, and consents that the Payee may release or surrender, exchange
or substitute any personal property or other collateral security now held
or
which may hereafter be held as security for the payment of this
Note.
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9. Usury
Savings Clause. All
agreements between the Maker and the Payee are hereby expressly limited to
provide that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to the Payee for the use, forbearance
or detention of the indebtedness evidenced hereby exceed the maximum amount
which the Payee is permitted to receive under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof or of the Loan
Agreement or any Loan Document thereunder, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then, ipso facto,
the
obligation to be fulfilled shall automatically be reduced to the limit of
such
validity, and if from any circumstance the Payee shall ever receive as interest
an amount which would exceed the highest lawful rate, such amount which would
be
excessive interest shall be applied to the reduction of the principal balance
of
any of the Maker’s Obligations (as such term is defined in the Loan Agreement)
to the Payee, and not to the payment of interest hereunder. To the extent
permitted by applicable law, all sums paid or agreed to be paid for the use,
forbearance or detention of the indebtedness evidenced by this Note shall
be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full, to the end that the rate or amount of
interest on account of such indebtedness does not exceed any applicable usury
ceiling. As used herein, the term “applicable law” shall mean the law in effect
as of the date hereof, provided, however, that in the event there is a change
in
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 Maker and the
Payee.
10. Collection
Costs. In
the event that the
Payee shall place this Note in the hands of an attorney for collection during
the continuance of any Event of Default, the Maker shall further be liable
to
the Payee for all costs and expenses (including reasonable attorneys’ fees)
which may be incurred by the Payee in enforcing this Note, all of which costs
and expenses shall be obligations under and part of this Note; and the Payee
may
take judgment for all such amounts in addition to all other sums due
hereunder.
IN
WITNESS WHEREOF, the Maker has executed this Note on the date first above
written.
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XXXXXXX
INDUSTRIES, INC.
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By:
/s/ Xxxxxxx X. Xxxxx, EVP
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Name:
Xxxxxxx X. Xxxxx
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Title:
Executive Vice President
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6
