EXHIBIT 10.39
DIVIDED REPLACEMENT NOTE NUMBER ONE
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$22,507,537.00 Dated as of February 12, 1999
FOR VALUE RECEIVED, Xxxx Telecom, Inc., a corporation organized and
existing under the laws of Florida (the "Borrower"), promises to pay to the
order of CellStar, Ltd., a limited partnership organized and existing under the
laws of Texas (the "Lender"), at the principal office of the Lender at 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000 (or at such other office or location as
the Lender shall specify to the Borrower in writing from time to time), the
principal sum of TWENTY TWO MILLION FIVE HUNDRED SEVEN THOUSAND FIVE HUNDRED
THIRTY SEVEN DOLLARS ($22,507,537.00) (the "Loan"), in lawful money of the
United States of America, and to pay interest on the aggregate unpaid daily
average outstanding principal balance hereof in like money at such office from
the date hereof until the principal hereof shall have become due and payable by
acceleration or otherwise, at a fixed rate per month equal to six tenths of one
percent (.60%) per month.
Interest on this Note shall be due and payable in quarterly installments on
the last day of January, April, July and October, commencing on April 30, 1999
(and at maturity, whether by acceleration or otherwise). The entire amount of
principal and accrued interest outstanding under this Note shall be due and
payable on January 31, 2003. Interest under this Note shall be calculated on
the average daily balance from time to time outstanding, on the basis of a 360-
day year for the actual number of days elapsed (i.e. 1/360th of a full year's
interest shall accrue for each day any principal amount of the Loan is
outstanding).
Principal on this Note shall be due and payable in twelve equal quarterly
installments of $1,875,628.10 on the last day of January, April, July and
October, commencing on April 30, 2000 (and at maturity, whether by acceleration
or otherwise).
The principal amount of this Note and all outstanding accrued interest
shall be payable in full, together with any accrued and unpaid interest thereon,
on January 31, 2003 (the "Maturity Date").
This Note will be subordinate in right of payment to the prior payment in
full of all Senior Indebtedness of the Borrower outstanding from time to time,
provided that so long as no payment of principal or interest under Senior
Indebtedness shall be due and unpaid, the Borrower shall pay (a) scheduled
installments of interest on this Note as and when the same become due and
payable, and (b) scheduled installments of principal on this Note as and when
the same become due and payable.
Upon any distribution to creditors of the Borrower in a liquidation or
dissolution of the Borrower or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Borrower or its property, an
assignment for the benefit of
creditors or any marshalling of the Borrower's assets and liabilities, the
holders of Senior Indebtedness of the Borrower will be entitled to receive
payment in full of all obligations due in respect of such Senior Indebtedness
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Indebtedness) before the Lender will be
entitled to receive any payment with respect to the Note, and until all
obligations with respect to Senior Indebtedness are paid in full, any
distribution to which the Lender would be entitled shall be made to the holders
of Senior Indebtedness.
Prior to a default under this Note, all payments received by Lender under
this Note, including, without limitation, any prepayments, shall be applied
first to accrued and unpaid interest under this Note (including interest payable
but not yet due) and then to the principal of indebtedness hereunder.
All payments by the Borrower under this Note shall be in such amounts as
may be necessary in order that all payments, after deduction or withholding for
or on account of any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof (collectively the "Taxes"), shall not be
less than the amounts otherwise specified to be paid under this Note.
Notwithstanding anything to the contrary contained in this paragraph, the
Borrower shall not be liable for the payment of any tax on or measured by net
income imposed on the Lender pursuant to the income tax laws of the United
States or by the jurisdiction under the laws of which the Lender is organized or
is or should be qualified to do business or any political subdivision thereof.
The Borrower shall further pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Note (herein referred to as "Other
Taxes"). The Borrower shall pay all Taxes and Other Taxes when due (and
indemnify the Lender against any liability therefor) and shall promptly (and in
any event not later than 30 days thereafter) furnish to the Lender any
certificates, receipts and other documents which may be required (in the
reasonable judgment of the Lender) to establish any tax credit to which the
Lender may be entitled. The Borrower shall indemnify the Lender for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this paragraph)
paid by the Lender or any liability (including interest and penalties) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the obligations of the Borrower under this
paragraph shall survive the termination of this Note and the repayment of the
Loan.
For the purposes hereof, the following terms shall have the following
meanings:
"Business Day" shall mean a day on which commercial banks are open for
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business in Dallas, Texas.
"Governmental Authority" shall mean, as to any Person, any government (or
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any political subdivision or jurisdiction thereof), court, bureau, agency
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or other governmental authority having jurisdiction over such Person or any
of its business, operations or properties.
"Indebtedness" shall mean, all obligations of the Borrower for borrowed
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money and any amendments, renewal, extension, deferral, modification,
restructuring or refunding of any such indebtedness.
"Person" shall mean any natural person, corporation, unincorporated
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organization, trust, joint-stock company, joint venture, association,
company, partnership or Governmental Authority.
"Senior Indebtedness" shall mean any and all Indebtedness of the Borrower;
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provided that the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness
shall be senior in right of payment to this Note.
Upon the happening of any of the following events, each of which shall
constitute a default hereunder (herein referred to as an "Event of Default"),
all liabilities of the Borrower to the Lender under this Note shall thereupon or
thereafter, at the option of the Lender, without notice or demand, become due
and payable; provided, however, that in the event of an Event of Default under
Subsection (a) below, no acceleration shall occur unless any amounts due remain
unpaid following the expiration of five (5) days following any written notice to
the Borrower of such Event of Default:
(a) failure of the Borrower to pay in full, when due, any monetary
liability whatsoever under this Note, including, without limitation,
any principal installment of this Note or interest installment hereon
for any reason or by reason of subordination, within five (5) business
days following the due date thereof;
(b) (i) the Borrower shall make an assignment for the benefit of
creditors, petition or apply to any court or other tribunal for the
appointment of a custodian, receiver or any trustee or shall commence
any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; (ii) or if there
shall have been filed any such petition or application, or any such
proceeding shall have been commenced against the Borrower, in which an
order for relief is entered and remains undismissed for a period of
thirty (30) days or more; (iii) the Borrower, by any act or omission
shall indicate consent to, approval of or fail to timely object to any
such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or any trustee or shall suffer any
such custodianship, receivership or trusteeship to continue
undischarged for a period of thirty (30) days or more; (iv) the
Borrower shall generally not pay its debts as such debts become due or
admit in writing its inability to pay its debts as they mature; or (v)
the Borrower shall have concealed, removed or permitted to be concealed
or removed any part of its properties or assets, with intent to hinder,
delay or
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defraud its creditors or any of them, or made or suffered a transfer of
any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law, or shall have made any transfer
of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or (vi) be
"insolvent," as such term is defined in the federal bankruptcy code of
the United States or under the laws of the jurisdiction in which the
Borrower is organized;
(c) the taking of possession of any substantial part of the property
of the Borrower at the instance of any Governmental Authority, which is
not cured within twenty (20) days;
(d) the dissolution of Borrower;
(e) an Event of Default (as defined therein) has occurred under any of
the Xxxx Notes (as hereinafter defined); provided, that, such lender
has exercised his right to accelerate the payment due under the Note
prior to its scheduled maturity date.
If there shall occur any Event of Default hereunder, the entire outstanding
principal balance under this Note shall bear interest for any period during
which such principal or interest shall be overdue or during the pendency of any
such Event of Default at the rate of eighteen percent (18%) per annum (the
"Default Rate"), payable on demand.
The Borrower agrees to pay all reasonable costs incurred by any holder
hereof, including reasonable attorneys' fees (including those for appellate
proceedings), incurred in connection with any Event of Default, or in connection
with the collection or attempted collection or enforcement hereof, whether or
not legal proceedings may have been instituted.
In the event of any demand by Lender for payment hereunder or if an Event
of Default has occurred, the Borrower shall immediately provide written notice
to the holders of the Xxxx Notes (as hereinafter defined) at the address
therefor in the Borrower's books and records.
All parties to this Note, including the Borrower and any sureties,
endorsers or guarantors, hereby waive presentment for payment, demand, protest,
notice of dishonor, notice of acceleration of maturity, and all defenses on the
ground of extension of time for payment hereof, and agree to continue and remain
bound for the payment of principal, interest and all other sums payable
hereunder, notwithstanding any change or changes by way of release, surrender,
exchange or substitution of any security for this Note or by way of any
extension or extensions of time for payment of principal or interest; and all
such parties waive all and every kind of notice of such change or changes and
agree that the same may be made without notice to or consent of any of them.
Rights and remedies of the holder as provided herein shall be cumulative
and concurrent and may be pursued singularly, successively or together at the
sole discretion of the holder, and may be exercised as often as occasion
therefor shall occur, and the
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failure to exercise any such right or remedy shall in no event be construed as a
waiver or release of the same.
No failure on the part of Lender to exercise any right or remedy hereunder,
whether before or after the happening of an Event of Default shall constitute a
waiver thereof, and no waiver of any past Event of Default shall constitute a
waiver of any future Event of Default or of any other Event of Default. No
failure to accelerate the debt evidenced hereby by reason of default hereunder,
or acceptance of a past due installment, or indulgence granted from time to time
shall be construed to be a waiver of the right to insist upon prompt payment
thereafter or to impose late charges retroactively or prospectively, or shall be
deemed to be a novation of this Note or a reinstatement of the debt evidenced
hereby or a waiver of such right or acceleration or any other right, or be
construed so as to preclude the exercise of any right that Lender may have,
whether by the laws of the State of Florida, by agreement, or otherwise; and
Borrower and each endorser hereby expressly waives the benefit of any statute or
rule of law or equity that would produce a result contrary to or in conflict
with the foregoing. This Note may not be modified, altered or amended orally,
and shall be modified, altered or amended only by an agreement in writing signed
by the party against whom such agreement is sought to be enforced.
None of Lender or its affiliates, officers, directors, employees, agents or
representatives shall be responsible to Borrower for any act or failure to act
hereunder or pursuant hereto, except in respect of damages attributable solely
to their own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction, nor for any punitive, exemplary, indirect or
consequential damages.
Anything herein to the contrary notwithstanding, the obligations of the
Borrower under this Note shall be subject to the limitation that payments of
interest to the Lender shall not be required to the extent that receipt of any
such payment by the Lender would be contrary to provisions of law applicable to
the Lender (if any) which limit the maximum rate of interest which may be
charged or collected by the Lender; provided, however, that nothing herein shall
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be construed to limit the Lender to presently existing maximum rates of
interest, if an increased interest rate is hereafter permitted by reason of
applicable federal or state legislation. In the event that the Borrower makes
any payment of interest, fees or other charges, however denominated, pursuant to
this Note, which payment results in the interest paid to the Lender to exceed
the maximum rate of interest permitted by applicable law, any excess over such
maximum shall be applied in reduction of the principal balance owed to the
Lender as of the date of such payment, or if such excess exceeds the amount of
principal owed to the Lender as of the date of such payment, the difference
shall be paid by the Lender to the Borrower.
This Note, together with the other Divided Replacement Notes (as
hereinafter defined) amends and restates in its entirety, but does not satisfy
the indebtedness evidenced by, that certain Promissory Note, dated as of
September 1, 1998, in the principal amount of up to $26,990,000, made by
Borrower payable to the order of Lender (the "Existing Note"). Immediately
prior to the effectiveness of this Note, the
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outstanding principal balance of the Existing Note is $26,990,000. As of the
date hereof, and without any further action on the part of any party, the entire
outstanding principal balance of the Existing Note shall be deemed to be
outstanding under this Note and the Divided Replacement Notes with the same
allocation between principal and interest as under said Existing Note. Nothing
herein shall be deemed as a satisfaction, novation or refinancing of the
indebtedness evidenced by the Existing Note. For the purposes hereof, "Divided
Replacement Notes" means and includes the following: (i) this Note, (ii) that
certain Divided Replacement Note Number Two in the principal amount of $838,165,
dated as of the date hereof, made by the Borrower payable to the order of the
Lender ("Divided Replacement Note Number Two"), (iii) that certain Divided
Replacement Note Number Three in the principal amount of $837,165, dated as of
the date hereof, made by the Borrower payable to the order of the Lender
("Divided Replacement Note Number Three"), (iv) that certain Divided Replacement
Note Number Four in the principal amount of $265,394, dated as of the date
hereof, made by the Borrower payable to the order of the Lender ("Divided
Replacement Note Number Four"), (v) that certain Divided Replacement Note Number
Five in the principal amount of $279,138, dated as of the date hereof, made by
the Borrower payable to the order of the Lender ("Divided Replacement Note
Number Five"), and (vi) that certain Divided Replacement Note Number Six in the
principal amount of $279,138, dated as of the date hereof, made by the Borrower
payable to the order of the Lender ("Divided Replacement Note Number Six").
The Dividend Replacement Notes Number Two, Three, Four, Five and Six being
endorsed and assigned to Xxxxx Xxxx, Xxxx Xxxx, Xxxx Xxxx, Xxxxx and Xxxx Xxxx
as joint tenants with right of survivorship and Xxxxx Xxxx Wine, pro rata shall
be referred to herein as the "Xxxx Notes".
All scheduled payments of principal and interest on this Note and the Xxxx
Notes shall be made pro rata; provided that if the Borrower has insufficient
funds to permit full payment of all principal and interest which so becomes due
and payable, then such funds shall be allocated first to the repayment of
interest pro rata based upon the amount of interest due and payable under this
Note and the Xxxx Notes and then to the payment of principal pro rata based upon
the amount of principal due and payable under this Note and the Xxxx Notes,
provided that in all events, the failure by the Borrower to make full payment of
all principal and interest which so becomes due and payable shall constitute an
Event of Default hereunder. In the event that the holder of this Note and the
Xxxx Notes receives an amount in excess of the amount to which such holder is
entitled by operation of the preceding sentence, such holder shall be deemed to
have received such excess amount in trust for the benefit of the other holder
receiving less than the amount to which such holder is so entitled, and shall
promptly remit such excess amount to such other holder so as to give effect to
such preceding sentence.
The Borrower shall have the right, at any time or from time to time, to
prepay the Note in whole or in part, without premium or penalty; provided, that,
each prepayment by the Borrower shall be applied, first, to pay interest accrued
and unpaid as of the date of prepayment under this Note and each Xxxx Note (this
Note and the Xxxx Note shall be referred to collectively as the "New Notes");
provided, further, that (i) prepayments by
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the Borrower under this Note and each Xxxx Note shall be made first to accrued
interest as of the date of prepayment under this Note and each Xxxx Note pro
rata, and then to principal outstanding under this Note as of the date of
prepayment under this Note, pro rata, in inverse order of maturity and (ii) the
preceding clause (i) shall not apply to prepayments resulting from the exercise
of preemptive rights or the exercise of the Borrower's right to set off, as
described below. For the purposes hereof, as to a New Note, (i) as to interest,
"pro rata" shall mean the percentage interest accrued and unpaid to the date of
prepayment of such New Note divided by the interest accrued and unpaid to the
date of prepayment on all of the New Notes and (ii) as to principal, "pro rata"
shall mean the principal amount outstanding as of the date of prepayment of such
New Note divided by the principal amount outstanding as of the date of
prepayment on all of the New Notes. Nothing herein shall be construed to
prohibit the Lender from accepting prepayments of principle or interest in whole
or in part.
The Borrower may satisfy amounts due under this Note by right of set off,
to the extent permitted by applicable law, against any amounts payable under any
credits or other obligations due Borrower from the Lender that are not paid as
and when due; provided, however, that (i) the proposed set off is approved by
the Borrower's board of directors at a meeting in which the director designated
by CellStar Telecom, Inc. is present, and (ii) any amounts set off shall be
applied as though it were a prepayment under this Note, as set forth above.
The rights and obligations of the Lender hereunder may be assigned as
security, to Chase Bank of Texas, N.A., or to any other lender which is a party
to the Credit Agreement dated October 15, 1997 by and among CellStar, Ltd.,
Chase Bank of Texas, N.A. and the other Banks thereunder (the "Credit
Agreement"), or to any successor lenders under the Credit Agreement, or to
creditors under any credit agreement of CellStar, Ltd., entered into subsequent
to the date hereof, without any approval or consent of, or notice to, the
Borrower.
All notices and other communications to the Borrower under this Note shall
be deemed given when delivered personally or by overnight mail to the Borrower
at Xxxx Telecom, Inc., 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention:
X.X. Xxxxxx.
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
FLORIDA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. BORROWER
HEREBY, AND THE LENDER BY ITS ACCEPTANCE OF THIS NOTE, CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN MIAMI-DADE COUNTY, FLORIDA SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER AND LENDER PERTAINING TO THIS NOTE OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS NOTE, PROVIDED, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
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OPERATE TO
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PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER.
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO BORROWER AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID.
THE BORROWER HEREBY, AND THE LENDER BY ITS ACCEPTANCE OF THIS NOTE, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN LENDER AND BORROWER ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THIS NOTE OR THE TRANSACTIONS RELATED HERETO OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
MAKING THE LOAN EVIDENCED BY THIS NOTE.
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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of
the date first above written.
Xxxx Telecom, Inc.,
a Florida corporation
By: /s/ X. X. XXXXXX
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Its: President
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The undersigned, CellStar, Ltd., a Texas limited partnership, hereby
assigns and endorses, without recourse, representation or warranty, this
Promissory Note, this 17th day of February 1999, to Chase Bank of Texas, N.A.,
as Agent for itself and other Banks under that Certain Credit Agreement dated
October 15, 1997, by and among CellStar, Ltd., Chase Bank of Texas, N.A. and the
other Lenders thereunder, as amended. 1998.
CellStar, Ltd.
By National Auto Center, Inc.
Its General Partner
/s/ XXXXXX XXXX XXXXXXXXX
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By: Xxxxxx Xxxx Xxxxxxxxx
Its: Vice President
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