Exhibit 10.11
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD, UNLESS IT
HAS BEEN REGISTERED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THIS SECURITY IS SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 6 HEREOF.
XXXXXXXX HOLDINGS CORP.
10.65% JUNIOR SUBORDINATED NOTE DUE JANUARY 31, 2007
US $5,000,000 January 14, 1998
For value received and intending to be legally bound, XXXXXXXX
HOLDINGS CORP., a Delaware corporation (the "Company"), hereby promises to pay
to the order of Stockholders Representative, on behalf of all of the
Stockholders, (together with any subsequent holder of this Note, the "Holder"),
the principal sum of Five Million Dollars ($5,000,000), and to pay interest on
the principal amount of this Note at the rate of ten and sixty-five one
hundredths percent (10.65%) per annum, such principal and interest to be payable
at the times and in the manner hereinafter set forth. Certain capitalized terms
used herein and not otherwise defined herein are defined in Section 12 hereof.
1. Interest and PIK Notes.
1.1 Interest. This Note shall bear interest on the unpaid
principal amount at a rate per annum equal to ten and sixty-five one hundredths
percent (10.65%). Accrued but unpaid interest hereon shall be payable annually
in arrears on January 14th of each year, commencing January 14, 1999 (each such
date being a "Payment Date").
1.2 PIK Notes. Notwithstanding the foregoing, with respect to
any Payment Date occurring on or prior to January 14, 2001, the Company may
issue a note (a "PIK Note"), dated such Payment Date, having a principal amount
equal to all or a portion of the interest amount due on such Payment Date in
lieu of paying a like amount of the interest due on such Payment Date in cash.
Except as otherwise set forth in this Note, the PIK Notes shall be identical to
this Note.
2. Method of Payment. The Company shall pay interest and principal
on this Note to Holder by a wire transfer of immediately available funds to the
account or accounts specified by the Holder in writing, or, as and to the extent
permitted by Section 1.2, by delivering a PIK Note, at Holder's address
specified in Section 13.5 hereof, or to such other address designated in writing
by Holder and provided to the Company at least ten (10) Business Days before any
Payment Date.
The Company shall pay all principal and interest payments required to be
paid in cash in money of the United States of America that at the time of
payment is legal tender for payment of public and private debts.
If the date of an interest or principal payment is not a Business Day,
payment may be made at that place on the next succeeding Business Day, and no
interest on the amount payable shall accrue for the intervening period. Interest
under this Note shall be calculated on the basis of a 365-day year and actual
days elapsed from and including the date of issuance or the last Payment Date,
as the case may be, until and including the date immediately preceding the date
of any payment.
3. Repayment. The principal on this Note together with accrued but
unpaid interest hereon shall be immediately due and payable and shall be repaid
in full upon the earliest occurrence of any of the following events:
(a) January 31, 2007;
(b) an IP0;
(c) a Change of Control; or
(d) a Recapitalization.
4. Extension Fee. If all or a portion of this Note is outstanding
on January 14, 2003, (the "Extension Date"), the Company shall pay on the
Extension Date to the Holder, as additional interest, an extension fee
("Extension Fee") equal to five percent (5%) of the principal amount hereof
outstanding on the Extension Date in the manner provided in Section 2 hereof. No
Extension Fee will be payable with respect to any PIK Notes.
5. Redemption. The Company may redeem this Note in whole at any
time or in part from time to time at the following redemption prices (expressed
in percentages of the principal amount then outstanding), plus accrued and
unpaid interest, if any, to the redemption date, if redeemed during the
12-month period beginning on or after January 14th of the years set forth below:
Period Redemption Price
------ ----------------
1998 103%
1999 102%
2000 101%
2001 and thereafter 100%
Notice of redemption shall be mailed by first-class mail at least ten (10)
days but not more than sixty (60) days before the redemption date to the Holder
of this Note at the address set forth in Section 13.5.
6. Transfer.
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6.1 Restrictions on Transfer. The Holder of this Note may not
sell, assign or transfer this Note or any portion hereof prior to January
14, 2003, provided however, that the Holder of this Note may sell, transfer or
assign this Note or any portion hereof at any time to (a) any other Stockholder
or to any trust for the benefit of any Stockholder (including any trust for the
benefit of Holder), (b) any spouse or descendant (natural or adopted) of any
Stockholder or any trust for the benefit of any spouse or descendant of a
Stockholder, (c) The Xxxxxxxx Foundation or (d) any other holder of equity
securities of the Company as of the date the Note was originally issued.
6.2 Transfer Procedures. When this Note is presented to the
Company with a request to transfer all or any portion thereof and such transfer
is permitted by Section 6.1 hereof, or if a Holder wishes to exchange this Note
for an equal principal amount of Notes of other denominations, the Company shall
make the transfer or exchange as requested, and issue replacement Notes of the
same tenor as this Note to the appropriate parties; provided, however, that if
this Note is presented or surrendered for transfer or exchange it shall be duly
endorsed or be accompanied by a written instrument of transfer duly executed by
the Holder or his attorney duly authorized in writing.
7. Covenants. The Company covenants and agrees that so long as any
portion of this Note is outstanding, and unless the Holder otherwise agrees in
writing:
7.1 Payment of Note. The Company shall pay the principal and
interest on this Note and any other amounts due hereunder on the dates and in
the manner provided in this Note.
7.2 Limitations on Transactions with Affiliates. Neither the
Company nor any of its Subsidiaries may effect any transaction with any of their
respective Affiliates (except for the Company and its Subsidiaries) on a basis
less favorable to the Company and its Subsidiaries than would be the case if
such transaction had been effected with a non-Affiliate; provided however, that
the Company and its Subsidiaries shall not be prohibited from making Permitted
Affiliate Payments.
7.3 Limitation on Additional Indebtedness. The Company will
not, and will not permit any Subsidiary of the Company to, directly or
indirectly, incur any Indebtedness (including any Indebtedness of a Person
existing at the time of the acquisition of such Person or assumed in connection
with the acquisition of assets from such Person) unless after giving effect to
the incurrence of such Indebtedness and the receipt and application of the
proceeds thereof, (a) the ratio of the total Indebtedness of the Company and its
Subsidiaries (excluding any Indebtedness owed to a Subsidiary by any other
Subsidiary or the Company and any Indebtedness owed to the Company by any
Subsidiary) to the sum of the Company's EBITDA plus Consolidated Pro Forma
Acquisition EBITDA (based on the last four fiscal quarters of the Company and
its consolidated Subsidiaries for which financial statements are available at
the date of determination) is less than (i) 6.0 to 1 if the Indebtedness is
incurred after the date hereof but prior to January 14, 2000, (ii) 5.5 to 1 if
the Indebtedness is incurred on or after January 14, 2000 but prior to January
14, 2001, and (iii) 5.0 to 1 if the Indebtedness is
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incurred on or after January 14, 2001 and (b) the ratio of Funded Debt of the
Company and any of its Subsidiaries (excluding Indebtedness owed to a Subsidiary
by any other Subsidiary) to the sum of the Company's EBITDA plus Consolidated
Pro Forma Acquisition EBITDA (based on the last four fiscal quarters of the
Company and its consolidated Subsidiaries for which financial statements are
available at the date of determination) is less than (i) 5.0 to 1 if the Funded
Debt is incurred after the date hereof but prior to January 14, 2000, (ii) 4.5
to 1 if the Funded Debt is incurred on or after January 14,2000 but prior to
January 14, 2001, (iii) 4.0 to 1 if the Funded Debt is incurred on or after
January 14, 2001. For purposes of making a determination under this paragraph of
this Section 7.3, total Indebtedness and Funded Debt shall not include any
revolving credit Indebtedness (including revolving credit Indebtedness under the
Credit Agreement) to the extent that such Indebtedness (i) is required by the
terms of the instrument governing such revolving credit Indebtedness to be paid
down at least once annually or (ii) is available under a credit facility, but is
not outstanding as of the applicable date of determination. Any revolving credit
Indebtedness not subject to clause (i) shall be subject to the provisions of
this paragraph when incurred, but once incurred in accordance with this Section
7.3, such Indebtedness may continue to exist and be outstanding and may be
repaid and reborrowed up to such amount incurred as permitted under this
paragraph without being subject to any further test under this paragraph.
Notwithstanding anything in this Note to the contrary, the Company and its
Subsidiaries may incur Indebtedness under the Credit Agreement up to
$132,000,000 (including revolving credit Indebtedness) (the "Credit Agreement
Cap") without regard to the limitations contained in the first paragraph of this
Section 7.3 or elsewhere in this Note. The amount of the Credit Agreement Cap
shall be reduced by any permanent reduction of Indebtedness under the Credit
Agreement.
7.4 Limitation on Distributions. Neither the Company nor any
of its Subsidiaries shall directly or indirectly make any Distributions, except
that the following shall be permitted: (a) Subsidiaries of the Company may make
Distributions to the Company or to any wholly-owned Subsidiary of the Company,
(b) repurchasing shares of the Company's Capital Stock from a former employee or
consultant of the Company (or Subsidiary of the Company) where such repurchase
arises from the Company's option or obligation to repurchase such shares upon
termination of such employee's employment (including the obligation of the
Company to repurchase the shares of Xxxxx X. Xxxxxxxx pursuant to the Employment
Agreement between Xxxxx X. Xxxxxxxx and the Company), (c) Permitted Tax
Distributions or (d) distributions of Capital Stock other than any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or at the option of the holder,
matures or is mandatorily redeemable in whole or in part prior to the maturity
date of the Note.
8. Subordination.
8.1 Subordination. The Company, for itself and its successors,
and the Holder, by its acceptance thereof, agrees that this Note is and shall be
subordinated in right of payment, to the extent and in the manner provided in
this Section 8, to the prior payment in full of all obligations pursuant to
Senior Debt. For the purposes of this Note, Senior Debt shall not be
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deemed to have been paid in full until the holders or owners of the Senior Debt
shall have indefeasibly received payment of all obligations arising with respect
to such Senior Debt in cash. This Section 8 shall constitute a continuing offer
to all persons who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Debt, and such provisions are made for the benefit of
the holders of Senior Debt, and such holders are made obligees hereunder and any
one or more of them may enforce such provisions.
8.2 Dissolution; Liquidation; Bankruptcy. Upon any payment or
distribution of all or any of the assets or securities of the Company of any
kind or character upon any dissolution, winding up, liquidation, reorganization,
arrangement, adjustment, protection, relief or other similar case or proceeding
under any federal or state bankruptcy or similar law (whether voluntary or
involuntary, in bankruptcy, insolvency, receivership, arrangement,
reorganization or relief proceedings or upon any assignment for the benefit of
creditors or any marshaling of the assets and liabilities of the Company or
otherwise) (the foregoing being a "Reorganization"):
(a) all Senior Debt shall first be entitled to be paid
in full before the Holder is entitled to receive any payment on account of this
Note; and
(b) any payment or distribution in respect of this Note
to which the Holder would be entitled except for the provisions of this Section
8, shall be paid by the Company, the liquidating trustee or agent or other
person making such payment or distribution directly to the holders of the Senior
Debt or their representative or to the trustee under any indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as the
case may be, for application (in the case of cash, or as collateral in the case
of non-cash property or securities) for, the payment or prepayment in full of
all Senior Debt remaining unpaid, after giving effect to any concurrent payment
or distribution (in the case of cash) to the holders of such Senior Debt.
8.3 Specific Powers in Reorganization. In any proceedings with
respect to any Reorganization, the Holder irrevocably authorizes the
Representative or if there is more than one Representative, the Representative
of the Senior Debt with the highest priority:
(a) to prove and enforce any claims on this Note owed by
the Company to the Holder either in the name of the Representative or in the
name of the Holder as the attorney-in-fact of the Holder;
(b) to vote claims arising from this Note and to accept
or reject on behalf of the Holder any plan proposed in connection with any such
Reorganization;
(c) to accept and execute receipts for any payment or
distribution made with respect to this Note and to apply such payment or
distribution to the payment of this Note; and
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(d) to take any action and to execute any instruments
necessary to effectuate the foregoing, either in the name of the Representative
or in the name of the Holders as the attorney-in-fact of the Holder.
8.4 Default.
(a) In the event that any Senior Debt Payment Default
shall have occurred and be continuing, unless and until such Senior Debt Payment
Default shall have been cured or waived in writing, then no payment shall be
made by or on behalf of the Company for or on account of this Note, and the
Holder shall not take or receive from the Company, directly or indirectly, in
cash or other property, payment for all or any of this Note (except the Holder
may receive the PIK Notes and any other Indebtedness which is subordinated to at
least the same extent as this Note is to (x) Senior Debt and (y) any securities
issued in exchange for Senior Debt).
(b) In addition, upon the occurrence of a Senior Debt
Non-Payment Default, no payment shall be made by or on behalf of the Company for
or on account of this Note, and the Holder shall not take or receive from the
Company, directly or indirectly, in cash or other property, payment of all or
any of this Note (except the Holder may receive the PIK Notes and any other
Indebtedness which is subordinated to at least the same extent as this Note is
to (x) Senior Debt and (y) any securities issued in exchange for Senior Debt)
during the period (the "Payment Blockage Period") commencing on the date of
receipt by the Company of a written notice from the Representative of Specified
Senior Debt of such Senior Debt Non-Payment Default and extending unless and
until the earliest of (a) such Payment Blockage Period shall have been
terminated by written notice to the Company or the Holder from the
Representative of the Specified Senior Debt, (b) such Senior Debt Non-Payment
Default shall have been cured or waived in writing or shall have ceased to exist
or such Specified Senior Debt shall have been paid in full or (c) more than 179
days shall have elapsed since the receipt of such written notice by the Company
from the Representative regarding such Senior Debt Non-Payment Default, after
which, in the case of clauses (a), (b) and (c), the Company shall resume
payments and distributions in respect of this Note, including any missed
payments. Notwithstanding any other provision of this Note, in no event shall a
Payment Blockage Period commenced in accordance with the provisions of this Note
described in this paragraph extend beyond 179 days from the date of receipt by
the Company of the notice referred to above (the "Initial Blockage Period"). Any
number of additional Payment Blockage Periods may be commenced during the
Initial Blockage Period, provided, however, that no such additional Payment
Blockage Period shall extend beyond the Initial Payment Blockage Period. After
the expiration of the Initial Payment Blockage Period, no Payment Blockage
Period may be commenced until at least 190 days have elapsed from the last day
of the Initial Blockage Period. Notwithstanding any other provision of this
Note, no Senior Debt Non-Payment Default which existed or was continuing on the
date of commencement of any Payment Blockage Period initiated by the
Representative shall be, or be made, the basis for the commencement of a second
Payment Blockage Period initiated by the Representative, whether or not within
the Initial Blockage Period, unless such Senior Debt Non-Payment Default shall
have been cured or waived for a period of not less than 180 consecutive days.
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(c) Payments Held in Trust. If, notwithstanding the
foregoing provisions of this Section 8.4, any payment or distribution of the
assets of the Company or any of its present or future Subsidiaries of any kind
or character shall be received, by way of set-off or otherwise, by the Holder at
a time when such payment or distribution is prohibited by this Section 8.4, and
before all Senior Debt is paid in full, such payment or distribution and the
amount of any such set-off shall be held in trust by the Holder and promptly
paid over to the Representative (who shall have the right to convert any such
assets into cash) for application to the payment of Senior Debt until all such
Senior Debt shall have been paid in full, after giving effect to any concurrent
payment or distribution to the holders of Senior Debt.
(d) Notice of Senior Debt Defaults to Holder. The
Company shall advise the Holder in writing of the occurrence of any Senior Debt
Payment Default or Senior Debt Non-Payment Default within seven (7) Business
Days of the Company's actual knowledge of the occurrence thereof
8.5 Restrictions on Acceleration. No Holder may without the
prior written consent of the Representative and the representative of the
holders of any Specified Senior Debt, (a) accelerate the maturity of, or
institute proceedings to enforce against the Company, this Note notwithstanding
any term or provision to the contrary contained herein or in any agreement or
instrument relating hereto (provided that the Holder shall not be prohibited
from instituting proceedings seeking equitable relief from a breach by the
Company of Sections 7.2, 7.3 and 7.4 hereof) or (b) commence or join with any
other creditor or creditors of the Company in commencing any proceeding against
the Company seeking to effect a reorganization of the Company unless and until
(i) the expiration of 180 days from the date the Holder provides notice to each
such Representative that a default has occurred under this Note and that the
Holder desires to take action against the Company as a consequence thereof, (ii)
the earlier waiver or cure of the default giving rise thereto, (iii) the
acceleration by the Representative or any holder of any Specified Senior Debt,
(iv) the commencement of any foreclosure action available to the holders of
Specified Senior Debt, (v) the payment in full, in cash or cash equivalents, of
all Senior Debt and the termination of the Representative's commitment to extend
credit pursuant to the Credit Agreement or (vi) the occurrence of any event set
forth in Section 9.1(e) or (f).
8.6 Holder to be Subrogated to Rights of Holders of Senior
Debt. Upon payment in full of all obligations arising with respect to Senior
Debt, the Holder shall be subrogated to the rights of the holders of Senior Debt
to receive payments or distributions of assets of the Company applicable to the
Senior Debt until this Note shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of Senior Debt by
or on behalf of the Company or by or on behalf of the Holder by virtue of this
Section 8 which otherwise would have been made to the Holder shall, as among the
Company, its creditors other than the holders of Senior Debt and the Holder, be
deemed to be payment by the Company to or on account of the Senior Debt, it
being understood that the provisions of this Section 8 are and are intended
solely for the purpose of defining the relative rights of the Holder, on the one
hand, and the holders of Senior Debt, on the other hand.
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If any payment or distribution to which the Holder would
otherwise have been entitled but for the provisions of this Section 8 shall have
been applied, pursuant to the provisions of this Section 8, to the payment of
all amounts payable under the Senior Debt, then and in such case, the Holder
shall be entitled to receive from the holders of such Senior Debt at the time
outstanding any payments or distributions received by such holders of Senior
Debt in excess of the amount sufficient to pay holders of Senior Debt all
amounts payable under or in respect of the Senior Debt in full in cash.
8.7 Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Debt. The Company agrees that it will not make
any payment under this Note, or take any other action, in contravention of the
provisions of this Section 8, and no right of any present or future holders of
any Senior Debt to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Note, regardless
of any knowledge thereof which any such holder may have or be otherwise charged
with. The holders of Senior Debt may extend, renew, modify, amend or restructure
the terms of the Senior Debt or any instrument or agreement evidencing or
governing the same or any security therefor and release, sell or exchange any
security therefor and otherwise deal freely with the Company, all without
affecting the liabilities and obligations of the Holder. No provision in any
amendment, supplemental agreement or other agreement, documents, instrument
which adversely affects the superior position of the holders of the Senior Debt
shall be effective unless the consent of such holders for such action, shall
have been obtained.
8.8 Obligations of Company Unconditional. Nothing contained in
this Section 8 is intended to or shall impair, as between the Company and the
Holder, the obligations of the Company, which are absolute and unconditional, to
pay to the Holder the principal of, premium, if any, on and interest on this
Note as and when the same shall become due and payable in accordance with its
terms or is intended to or shall affect the relative rights of the Holder and
creditors of the Company other than the holders of the Senior Debt, and, except
as provided in Section 8.5, nothing contained herein shall prevent the Holder
from exercising all remedies otherwise permitted by applicable law upon an Event
of Default, subject to the rights, if any, under this Section 8 of the holders
of such Senior Debt in respect of cash, property, security or securities of the
Company received upon the exercise of any such remedy. The failure to make a
payment on account of principal of, premium, if any on or interest on this Note
by reason of any provision of this Section 8 shall not be construed as
preventing the occurrence of an Event of Default under Section 9.
Upon any payment or distribution of assets of the Company
referred to in this Section 8, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of the Representative or of the liquidating trustee or agent or
other person making any distribution to the Holder for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Section 8.
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9. Events of Default; Remedies.
9.1 Events of Default. If any one or more of the following
events ("Events of Default") shall occur (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body), that
is to say:
(a) if default shall be made in the due and punctual
payment of all or any part of the principal of this Note when and as the same
shall become due and payable in accordance with the terms hereof, whether at
the stated maturity thereof, upon acceleration or redemption, by notice of or
demand for prepayment, or otherwise;
(b) (i) if default shall be made in the due and punctual
payment of any interest (other than interest due on the first three Payment
Dates) on or any other amounts due under this Note when and as such interest or
amounts shall become due and payable and such default shall have continued for a
period of five (5) Business Days or (ii) if default shall be made in the due and
punctual payment of any interest due on the first three Payment Dates and such
default shall have continued for a period of ten (10) Business Days following
written notice by the Holder to the Company of such default;
(c) if default shall be made in the performance or
observance of any covenant, agreement or condition contained in this Note and
such default shall have continued for a period of thirty (30) days after the
earlier to occur of (i) the Company's Chief Executive Officer obtaining actual
knowledge of such default or (ii) the Company's receipt of written notice of
such default from the Holder hereof;
(d) if Indebtedness of the Company or any of its
Subsidiaries is not paid within any applicable grace period after final maturity
or is accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $10.0 million at the
time;
(e) if the Company or the Guarantor shall make a general
assignment for the benefit of creditors, or generally shall not pay their debts
as they become due, or shall admit in writing their inability to pay their debts
as they become due, or shall file a voluntary petition in bankruptcy, or shall
be adjudicated bankrupt or insolvent, or shall file any petition or answer
seeking for themselves any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or shall file any answer admitting or not
contesting the material allegations of a petition filed against either of them
in any such proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, custodian, receiver, liquidator or fiscal agent for
either of them or for all or any substantial part of its properties, or shall
(or its directors or stockholders shall) take any action looking to their
dissolution or liquidation;
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(f) if, within sixty (60) days after the commencement of
an action against the Company or the Guarantor seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such action shall
not have been dismissed or all orders or proceedings thereunder affecting the
operations or the business of the Company or the Guarantor stayed, or if the
stay of any such order or proceeding shall thereafter be set aside, or if,
within sixty (60) days after the appointment without the consent or acquiescence
of the Company of any trustee, custodian, receiver, liquidator or fiscal agent
for the Company or the Guarantor or for all or any substantial part of their
respective properties, such appointment shall not have been vacated;
then, in the case of an Event of Default and at the option of the Holder, (or in
the event that this Note has been transferred in part or is exchanged for more
than one Note pursuant to the terms of Section 6.1, then by holders of a
majority of the principal amount of Notes then outstanding) exercised by written
notice to the Company, and subject to the limitations set forth in Section 8.5,
the principal of and premium on this Note shall forthwith become due and
payable, together with interest accrued thereon, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
and the Company shall forthwith upon any such acceleration pay to the Holder the
entire principal of, premium on and interest accrued on this Note, provided,
further, that in the case of an Event of Default of the character described in
subparagraphs (e) and (f) of this Section 9, the principal of this Note shall
forthwith become due and payable, together with interest accrued thereon
(including any interest accruing after the commencement of any action or
proceeding under the federal bankruptcy laws, as now or hereafter constituted,
or any other applicable domestic or foreign federal or state bankruptcy,
insolvency or other similar law, and any other interest that would have accrued
but for the commencement of such proceeding, whether or not any such interest is
allowed as an enforceable claim in such proceeding), without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived, and the Company shall forthwith upon any such acceleration pay to the
Holder the entire principal of, premium on and interest accrued on this Note.
9.2 Remedies Cumulative. No remedy conferred in this Note upon
the Holder is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or thereunder or now or hereafter existing at law or in equity
or by statute or otherwise.
9.3 Remedies Not Waived. No course of dealing between the
Company and the Holder and no delay by the Holder in exercising any rights
hereunder shall operate as a waiver of any rights of Holder.
9.4 Application of Payments. In case any one or more of the
Events of Default shall have occurred, all amounts to be applied to the
prepayment or payment of the Note, shall be applied, after the payment of all
related costs and expenses incurred by the Holder (including, without
limitation, reasonable compensation to any and all trustees, liquidators,
receivers or similar officials and reasonable fees, expenses and disbursements
of counsel) in such order of priority as is determined by the Holder.
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10. Expenses; Indemnity. The Company will pay or cause to be
paid (or reimbursed, as the case may be) and will defend, indemnify and hold the
Holder harmless (on an after tax basis) in respect of all costs, losses,
expenses (including, without limitation, the reasonable fees, costs, expenses
and disbursements of counsel) and damages (collectively, "Indemnified
Costs") incurred by or asserted against Holder in connection with the
performance and/or enforcement of this Note (including, without limitation,
so-called work-outs and/or restructurings and all amendments, waivers and
consents hereunder and thereunder, whether or not effected).
11. Governing Law; Jurisdiction; Waiver of Jury Trial. This
Note, including the validity hereof and the rights and obligations of the
parties hereunder, and all amendments and supplements hereof and all waivers and
consents hereunder, shall be construed in accordance with and governed by the
domestic substantive laws of the Commonwealth of Pennsylvania without giving
effect to any choice of law or conflicts of law provision or rule that would
cause the application of the domestic substantive laws of any other
jurisdiction. The Company, to the extent that it may lawfully do so, hereby
consents to service of process, and to be sued, in the Commonwealth of
Pennsylvania and consents to the jurisdiction of the courts of the Commonwealth
of Pennsylvania and of the United States District Courts for the Eastern
District of Pennsylvania, as well as to the jurisdiction of all courts to which
an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of its obligations hereunder or with respect
to the transactions contemplated hereby, and expressly waives any and all
objections it may have as to venue in any such courts. The Company further
agrees that a summons and complaint commencing an action or proceeding in any of
such courts shall be properly served and shall confer personal jurisdiction if
served personally or by certified mail to it at its address set forth in Section
13 hereof or as otherwise provided under the laws of the Commonwealth of
Pennsylvania. Notwithstanding the foregoing, the Company agrees that nothing
contained in this Section 11 shall preclude the institution of any such suit,
action or other proceeding in any jurisdiction other than the Commonwealth of
Pennsylvania. THE COMPANY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST THE COMPANY IN RESPECT
OF ITS OBLIGATIONS HEREUNDER
12. Defined Terms. The following terms have the following
meanings:
12.1 "Affiliate" of any specified Person means any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
12.2 "Business Day" means any day that is not a Saturday
or a Sunday or a banking holiday in either Boston, Massachusetts or
Philadelphia, Pennsylvania.
-11-
12.3 "Capital Stock" means with respect to any Person, any and all shares
or other equivalents (however designated) of capital stock, partnership
interests, or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into or exercisable for any of the foregoing.
12.4 "Change of Control" shall mean the occurrence of one or more of the
following events: (a) any "person" (as such term is used in Section 3(a)(9) and
13(d)(3) of the Exchange Act), together with its affiliates and associates (as
such terms are defined in Rule 12b-2 promulgated under the Exchange Act), other
than the Original Investors, becomes the beneficial owner (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more of the total voting power (including shares of capital stock which are
non-voting but which are convertible into voting capital stock by their terms
subject only to applicable law), value or economic interest of the common stock
(or equivalent units) of the Company or the Guarantor or (b) any person,
together with its affiliates and associates, other than the Original Investors,
has the power, by contract or otherwise, to elect or to designate for election a
majority of the board of directors or other governing body of the Company or (c)
a sale or transfer (including by operation of law, such as in a merger) by the
Company or any of its Subsidiaries of all or substantially all of the
consolidated assets of the Company and its Subsidiaries to an entity not an
affiliate of the Company prior to such sale or transfer.
12.5 "CIVC Group" means Continental Illinois Venture Corporation and CIVC
Partners III and the affiliates, stockholders and partners of each of them and
advisors of the foregoing (but only to the extent Series A Preferred and Class A
Common Stock consisting of not more than 2% of aggregate amount of Capital Stock
purchased by Continental Illinois Venture Corporation is transferred to such
advisors).
12.6 "Consolidated Interest Expense" means, for any period, the total of:
(a) the aggregate amount of interest, including commitment fees after the date
hereof, payments in the nature of interest under capitalized leases and net
payments under interest rate protection agreements, paid or accrued by the
Company and its Subsidiaries (whether such interest is reflected as an item of
expense or capitalized in accordance with GAAP on a consolidated basis), plus
(b) to the extent otherwise not included in clause (a) above, the amortization
of deferred financing fees and costs, original issue discount relating to
indebtedness and accrued interest on indebtedness not paid or payable in cash to
the extent permitted by the terms, including subordination terms, of such
indebtedness (including any interest paid in kind).
12.7 "Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its Subsidiaries, for such period, determined in
accordance with GAAP on a consolidated basis; provided, however, that
Consolidated Net Income shall not include:
(a) the income (or loss) of any Person accrued prior to the date such
Person becomes a Subsidiary or is merged into or consolidated with the Company
or any of its Subsidiaries (other than a merger or consolidation of existing
Subsidiaries);
-12-
(b) the income (or loss) of any Person (other than a Subsidiary) in
which the Company or any of its Subsidiaries has an ownership interest;
provided, however, that (i) Consolidated Net Income shall include amounts in
respect of the income of such Person when actually received in cash by the
Company or such Subsidiary in the form of dividends or similar distributions and
(ii) Consolidated Net Income shall be reduced by the aggregate amount of all
investments, regardless of the form thereof, made by the Company or any of its
Subsidiaries in such Person for the purpose of funding any deficit or loss of
such Person;
(c) all amounts included in computing such net income (or loss) in
respect of the write-up of any asset of the Company or any of its Subsidiaries
on or after the date hereof, including the subsequent amortization or expensing
of the written-up portion of such asset;
(d) extraordinary, unusual or nonrecurring gains, including gains or
losses on the sale of assets other than sales of inventory;
(e) the income of any Subsidiary to the extent the payment of such
income in the form of a distribution or repayment of Indebtedness to the
Guarantor or a wholly-owned Subsidiary is not permitted, whether on account or
any Charter or By-law restriction, any agreement, instrument, deed or lease or
any law, statute, judgment, decree or governmental order, rule or regulation
applicable to such Subsidiary; and
(f) any after-tax gains or losses attributable to returned surplus of
any pension benefit plan.
12.8 "Consolidated Pro Forma Acquisition EBITDA" means for any period, to
the extent not already included in EBITDA, (a) the incremental net income of the
Company and its Subsidiaries which results from including in the calculation of
net income of the Company and its Subsidiaries for such period, on a pro forma
basis in accordance with GAAP, (i) the amount of historical revenue for such
period of each entity or business acquired by the Company or any of its
Subsidiaries during such period, minus (ii) the amount of historical expenses
for such period of each such acquired entity or business, plus (iii) the
aggregate amount by which income described in (i) would have been increased and
expenses described in (ii) would have been reduced had each such entity or
business been acquired by the Company or any of its Subsidiaries, as the case
may be, at the beginning of such period; plus (b) all amounts included in
(a)(ii) above (as adjusted pursuant to (a)(iii) above) in respect of: (i)
depreciation, amortization and other noncash charges and expenses (including
noncash charges and expenses included in the cost of goods sold) of such entity
or business, (ii) interest expense (calculated in a manner consistent with the
calculation of Consolidated Interest Expense) of such entity or business, and
(iii) taxes (whether current or deferred) based upon or measured by net income
of such entity or business; provided, that the amounts in (a)(iii) and (b) above
shall be determined in good faith by the Company's chief executive officer so
long as Xxxxx X. Xxxxxxxx is the Company's chief executive officer and
thereafter determined by the Company in good faith and subject to the reasonable
approval of the Holder of this Note.
-13-
12.9 "Credit Agreement" means the Credit Agreement dated as of January 14
1998 between the Company and BankBoston, N.A. and the other lenders party
thereto, as it may be amended, modified or supplemented from time to time, and
such agreement or any credit agreement or agreements evidencing any extension,
renewal, replacement, refunding or refinancing thereof, in whole or in part
(including, without limitation, inclusion of additional borrowers thereunder and
increase in availability thereunder or extension of maturity thereof).
12.10 "Distribution" means (a) the declaration or payment of any dividend
or distribution on or in respect of any shares of any class of capital stock of
or other equity interests in the Company, (b) the purchase, redemption or other
retirement of any shares of any class of capital stock of or other equity
interests in the Company or of options, warrants or other rights for the
purchase of such shares, directly, indirectly through a Subsidiary or otherwise,
(c) any other distribution on or in respect of any shares of any class of
capital stock of or equity or other beneficial interest in the Company and (d)
any payment of principal or interest with respect to, or any purchase,
redemption or defeasance of any Indebtedness of the Company (or any Subsidiary)
which by its terms or the terms of any agreement is subordinated to the payment
of this Note.
12.11 "Event of Default" shall have the meaning ascribed to it in Section 9
hereof
12.12 "EBITDA" means for any Person, for any period, an amount equal to,
without duplication, (a) the sum of (i) Consolidated Net Income for such period,
plus (ii) all amounts deducted in computing such Consolidated Net Income in
respect of (w) depreciation, amortization and other noncash charges and expenses
(including noncash charges or expenses included in the cost of goods sold), (x)
Consolidated Interest Expense, (y) taxes (whether current or deferred) based
upon or measured by net income, and (z) fees and expenses (including transition
expenses and other one time charges) payable with respect to or arising from
either the acquisition of The Xxxxxxxx Group, Ltd. or the acquisition by the
Company or its Subsidiaries of any other business; provided however, that EBITDA
for periods prior to the issuance hereof shall be the amounts indicated in
Exhibit 1 hereto.
12.13 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all rules and regulations thereunder.
12.14 "FCEC Group" means First Chicago Equity Corporation, Cross Creek
Partners VIII and the affiliates, stockholders and partners of each of them and
the advisors of the foregoing (but only to the extent Series A Preferred and
Class A Common Stock consisting of not more than 2% of the aggregate amount of
Capital Stock purchased by First Chicago Equity Corporation is transferred to
such advisors).
12.15 "Funded Debt" means Indebtedness excluding Seller Debt.
12.16 "GAAP" means generally accepted accounting principles as from time to
time in effect, including the statements and interpretations of the United
States
-14-
Financial Accounting Standards Board provided that in the event of a change in
generally accepted accounting principles from that in effect on December 31,
1997 that affects any of the calculations contained in Sections 7.2, 7.3 and 7.4
hereof, either the Company or the Holder may request a change in the definition
of GAAP, in which case the parties hereto shall negotiate in good faith with
respect to an amendment to this Note implementing such change.
12.17 "Guarantor" means The Xxxxxxxx Group, Ltd., an Illinois corporation.
12.18 "incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(an "incurrence," "incurred," "incurrable" and "incurring" shall have the
meanings correlative to the foregoing); provided that a change in GAAP that
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed incurrence of such Indebtedness.
12.19 "Indebtedness" means all obligations or liabilities of the Company
(or other specified Person), without duplication, in respect of:
(a) borrowed money;
(b) indebtedness evidenced by notes, bonds, debentures or similar
instruments;
(c) capitalized lease obligations;
(d) the deferred purchase price of assets, services or securities
including Seller Debt (other than ordinary trade accounts payable in the
ordinary course of business);
(e) reimbursement obligations, whether contingent or matured, with
respect to letters of credit, bankers acceptances, surety bonds, other financial
guarantees and interest rate protection agreements (without duplication of other
Indebtedness supported or guaranteed thereby);
(f) all guarantees of Indebtedness of others of the type in items (a)
through (e) referred to above.
12.20 "IPO" shall mean an underwritten initial public offering (other than
an Unit Offering) of the Capital Stock of the Company, or any Subsidiary of the
Company or of any holding company that owns all or substantially all of the
Capital Stock or other equity interests in the Company pursuant to a
registration statement on Form S-1 or other appropriate form filed with the
Securities and Exchange Commission.
-15-
12.21 "Note" or any reference thereto shall mean and be deemed to refer to
this Note.
12.22 "Original Investors" means the CIVC Group, the FCEC Group, any
Stockholder who owns any of the capital stock of the Company, The Xxxxxxxx
Foundation and their respective Permitted Transferees; provided, however, that
the term "Original Investors" shall not in any event mean or include
BankBoston, N.A. or Northwestern Mutual Life Insurance Company or any of their
respective Affiliates.
12.23 "Permitted Affiliate Payments" means (a) payments pursuant to the
Registration Agreement, the Stockholders Agreement or the Stock Purchase
Agreement, each dated as of the date hereof and any amendments, extensions,
renewals or replacements thereof that are not disadvantageous in any material
respect to the Holder in his or her capacity as such, and any payments pursuant
to the Company's Amended and Restated Certificate of Incorporation or Bylaws,
(b) payments in the ordinary course of business in respect of (i) reasonable
compensation paid to employees, officers and directors and (ii) advances and
reimbursements to employees for travel expenses, drawing accounts and similar
expenditures, (c) maintenance services contracts with any Affiliate of the
Company that are on terms comparable to contracts with non-Affiliates, (d) any
arrangement or agreement with any Stockholder or any Affiliate thereof and The
Xxxxxxxx Foundation and any amendments, extensions, renewals or replacements
thereof, and (e) loans to officers, directors and employees to finance the
purchase from the Company of capital stock of the Company.
12.24 "Permitted Tax Distribution" shall mean distributions by the Company
to its shareholders, partners or members from time to time in an amount
approximately equal to the income tax liability of such shareholders, partners
or members, as the case may be, of the Company resulting from the taxable income
of the Company (after taking into account, to the extent they may reduce such
tax liability, all of the prior tax losses of the Company to the extent such
losses have not been previously deemed to reduce the taxable income of the
Company and thereby reduce distributions for taxes in accordance herewith); such
distribution for taxes shall be based on the approximate highest combined tax
rate that applies to any one of the shareholders, partners, or members, as the
case may be, of the Company.
12.25 "Permitted Transferees" means (a) in the case of a Stockholder, any
person who takes pursuant to the applicable laws of descent and distribution,
any other Stockholder, any spouse or descendant (whether natural or adopted) of
any Stockholder and any trust for the benefit of any Stockholder or for the
benefit of any Stockholder's spouse and/or descendants and (b) in the case of
First Chicago Equity Corporation and Continental Illinois Venture Corporation,
each of Continental Illinois Venture Corporation and First Chicago Equity
Corporation, respectively, CIVC Partners III and Cross Creek Partners VIII and
any affiliate of First Chicago Equity Corporation and Continental Illinois
Venture Corporation and any director of the Company jointly selected by First
Chicago Equity Corporation and Continental Illinois Venture Corporation pursuant
to the terms of the Stockholders Agreement among the stockholders of the
Company, but only to the extent the original cost of the shares sold or
transferred to all such directors by First Chicago Equity Corporation and
Continental Illinois
-16-
Venture Corporation does not exceed in the aggregate $2 million. For the purpose
of this definition of "Permitted Transferees," affiliate shall mean and include
any Person, directly or indirectly controlling, controlled by or under common
control with such corporations and any partner of such corporations which is a
partnership. BankBoston, N.A. and Northwestern Mutual Life Insurance Company and
their respective Affiliates shall not be and shall not be considered in any
respect a "Permitted Transferee" under this definition or this Note.
12.26 "Person" shall mean any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
12.27 "Recapitalization" shall mean a transaction or a series of
related transactions pursuant to which the Company receives additional debt
and/or equity financing and all or a portion of such financing is used to make
distributions of more than $1 million to or on account of the holders of the
equity securities of the Company (other than, in any case, a transaction to
finance a Distribution permitted under Section 7.4(b).
12.28 "Representative" means the agent, trustee or representative (if
any) under the Credit Agreement for so long as the Credit Agreement shall remain
outstanding and thereafter any trustee, agent or representative (if any) with
respect to any issue of Senior Debt.
12.29 "Seller Debt" means (a) debt issued by the Company to target
shareholders, owners or interest holders in connection with acquisitions by the
Company or any of its Subsidiaries of at least a majority of the Capital Stock
or other beneficial interests in, or all or a significant portion of the assets
of any other Person or businesses and any non-competition or other payments in
the nature of purchase price required to be paid in connection with such
acquisitions and (b) Indebtedness in respect of this Note.
12.30 "Senior Debt" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or other insolvency
proceeding whether or not such interest constitutes an allowable claim in such
proceeding) on, and any and all other fees, expenses, reimbursement obligations,
indemnities, and other amounts owing pursuant to the terms of all agreements,
documents and instruments providing for, creating, securing, or evidencing or
otherwise entered into in connection with (a) all Indebtedness of the Company
owed to lenders or agents under the Credit Agreement and (b) all other
Indebtedness of the Company which does not expressly provide that it is to rank
pari passu with or subordinate to this Note and (c) all deferrals, renewals,
extensions and refundings of, and amendments, modifications and supplements to,
any of the Senior Debt described above. Notwithstanding anything to the contrary
in the foregoing, Senior Debt will not include (a) Indebtedness of the Company
to any of its Subsidiaries, (b) Indebtedness represented by this Note, (c) any
Indebtedness which by the express terms of the agreement or instrument creating,
evidencing or governing the same is junior or subordinate in right of payment to
this Note, (d) any trade payable arising from the purchase of
-17-
goods or materials or for services obtained in the ordinary course of business
and (e) Indebtedness incurred in violation of Section 7.3 hereof.
12.31 "Senior Debt Non-Payment Default" means any default or
event of default (other than a Senior Debt Payment Default) under any agreement
or instrument relating to Specified Senior Debt. For the purposes of the
immediately preceding sentence, an "event of default" shall exist when as a
result thereof the holders of the Specified Senior Debt are then permitted to
cause such Specified Senior Debt to become due prior to its scheduled maturity.
12.32 "Senior Debt Payment Default" means any default in the
payment of principal of, premium, if any, on or interest on, or other amounts
payable on, or in connection with, the Senior Debt, irrespective of whether such
default in payment results from a failure to pay any amount when originally
scheduled to be paid or upon acceleration or otherwise.
12.33 "Specified Senior Debt" means (a) any Senior Debt under
the Credit Agreement or (b) any Senior Debt which at the time of determination
exceeds $10.0 million in aggregate principal amount and is specifically
designated in the instrument evidencing such Senior Debt as "Specified Senior
Debt."
12.34 "Stockholders" shall mean Xxxxxxxx X. Xxxxxxxx, Xx., Xxxxx
X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxx and Xxxxx X.
XxXxxxx.
12.35 "Stockholders Representative" shall mean Xxxxxxxx X.
Xxxxxxxx, Xx. or his successor.
12.36 "Subsidiary" means, in respect of any Person, any
corporation, association, partnership or other business entity of which more
than fifty percent (50%) of the total voting power of the shares of Capital
Stock or other interests (including partnership interests) entitled (without
regard to the occurrence of any contingency) to vote in the election of the
directors, managers, or trustees thereof is at the time owned or controlled
directly or indirectly, by (a) such Person, (b) such Person and one or more
Subsidiaries of such Person or (c) one or more Subsidiaries of such Person.
12.37 "Unit Offering" means a public offering of a combination
of debt and equity securities of the registrant in which not more than 10% of
the gross proceeds received from the sale of such securities is attributed to
such equity securities.
13. General Provisions.
13.1 This Note embodies the entire agreement and understanding
by the Holder and the Company and supersedes all prior agreements and
understandings relating to the subject matter hereof.
13.2 Each covenant contained herein shall be construed (absent
an express provision to the contrary) as being independent of each other
covenant contained herein
-18-
and therein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant.
13.3 If any provision in this Note refers to any action taken
or to be taken by a person, or which such person is prohibited from taking, such
provision shall be applicable, whether such action is taken directly or
indirectly by such person, whether or not expressly specified in such
provision.
13.4 If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected.
13.5 All notices and other communications provided for herein
shall be in writing and shall be deemed given (a) on the date of delivery if
delivered personally; (b) on the date of transmission if sent via facsimile
transmission to the facsimile number given below, and the telephonic
confirmation of receipt is obtained promptly after completion of transmission;
(c) on the date after delivery to a reputable nationally recognized overnight
courier service or (d) three days after being mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or at
such other addresses for a party as shall be specified by a like notice):
(i) if to the Company, to the Company at:
Xxxxxxxx Holdings Corp.
000 X. Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with copies to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Fax: (000) 000-0000
Continental Illinois Venture Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Fax: (000) 000-0000
First Chicago Equity Corporation
Three First Xxxxxxxx Xxxxx
Xxxxx 0000
-00-
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Fax: (000)000-0000
(ii) if to Holder, to:
Xxxxxxxx X. Xxxxxxxx, Xx.
0000 Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
with a copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided for in this Section 13.5; provided that no such notice shall
be effective until it is received by the other parties hereto.
13.6 The section headings of this Note are for convenience only
and shall not affect the meaning or interpretation of this Note or any provision
hereof.
13.7 This Note shall inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the Holder.
13.8 Any term of this Note may, with the consent of the
Company, be amended, or compliance therewith may be waived, in writing only, by
the Holder, (or in the event that this Note has been transferred in part or is
exchanged for more than one Note pursuant to the terms of Section 6.1, then by
holders of a majority of the principal amount of Notes then outstanding)
provided that no such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived or impair any right consequent
thereon and provided further, that without the consent of each holder of any
Note affected, an amendment under this Section may not:
(a) reduce the percentage of Notes whose holders must
consent to an amendment or waiver;
(b) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(c) reduce the principal of or change the fixed maturity of
any Note or alter the redemption provisions of Sections 3, 4 and 5 hereof with
respect thereto;
-20-
(d) make any Note payable in money other than that stated
in this Note; or
(e) make any change in Section 7.1 hereof or in this
sentence of this Section 13.8.
-21-
IN WITNESS WHEREOF, the Company and Stockholders Representative have
executed this Note on the date first above written.
XXXXXXXX HOLDINGS CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice-President
STOCKHOLDERS REPRESENTATIVE:
/s/ Xxxxxxxx X. Xxxxxxxx, Xx.
----------------------------------------
Xxxxxxxx X. Xxxxxxxx, Xx.
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GUARANTEE OF THE XXXXXXXX GROUP, LTD.
FOR VALUE RECEIVED and intending to be legally bound, The Xxxxxxxx
Group, Ltd., an Illinois corporation, hereby unconditionally guarantees to the
Holder of this Note upon which this Guarantee is endorsed the due and punctual
payment of the principal of (including premium, if any) and interest on and
other amounts due under such Note (collectively the "Obligations") when and as
the same shall become due and payable, whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise, according to the
terms of such Note. In the event any part of the Obligations shall not have been
so paid in full when due and payable, the Guarantor hereby agrees to pay or
cause to be paid the amount of such Obligations which are then due and payable
and unpaid.
The Guarantee is a guarantee of payment and not of collectability. The
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of such Note, the
absence of any action to enforce the same, any waiver or consent by the Holder
of such Note with respect to any provisions thereof, the recovery of any
judgment against the Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Note or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in such Note and in this Guarantee.
THE XXXXXXXX GROUP, LTD.
By: /s/ Xxxxxxxx X. Xxxxxxxx, Xx.
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx, Xx.
Title: Chairman
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Exhibit 1
Ouarter Ended EBITDA
------------- ------
March 31, 1997 ($156,000)
June 30, 1997 $8,290,000
September 30, 1997 $7,166,000
December 31, 1997 $4,300,000
-24-
