Exhibit 10.2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, EXCHANGED, PLEDGED, HYPOTHECATED OR TRANSFERRED IN ANY
MANNER IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
PROMISSORY NOTE
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$6,200,000.00 August 13, 1998
FOR VALUE RECEIVED, the undersigned, ALLIN COMMUNICATIONS CORPORATION,
a Delaware corporation, its successors and assigns ("Maker"), hereby promises to
pay to the order of Xxxxx X. Xxxxx, Xx., his heirs and assigns ("Lender"), on
the Maturity Date (as such term is defined below), if not sooner paid, the
principal sum of Six Million Two Hundred Thousand and 00/100 Dollars
($6,200,000.00) owed to Lender by the Maker pursuant to that certain Stock
Purchase Agreement dated as of the date of this Note by and among Lender, Maker,
KCS Computer Services, Inc., Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxxx (the "Agreement"), together with interest xxxxxxx as provided
hereinafter.
Capitalized terms used herein and not otherwise defined herein shall
have the meaning given to such terms in the Agreement. The unpaid principal
balance hereof shall bear interest for each day until due at the rate of five
percent (5%) per annum and shall accrue and compound monthly commencing on the
date hereof. In the event that the Maker obtains additional financing from S&T
Bank, or any other third party, Maker shall prepay to Lender, on the date that
the first proceeds of such Loan are received by Maker, proceeds of such
additional financing thereof (up to $3,200,000) to Lender to be applied against
the accrued costs, interest and principal (in such order) then outstanding under
this Note. In addition, in the event that Maker sells a subsidiary or
substantially all of the operating assets of a subsidiary of Maker, Maker shall
prepay to Lender, on the date that the first proceeds of such sale are received
by Maker, the proceeds of such sale (a "Subsidiary Sale") to Lender to be
applied against the accrued costs, interest and principal (in such order) then
outstanding under this Note. If not sooner paid, all unpaid principal, accrued
interest and all other sums and costs incurred by the Lender shall be due and
payable on December 31, 1998 (the "Maturity Date") without notice, presentment
or demand.
Principal and interest shall be made payable to Lender and forwarded
to Lender at 000 Xxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other
place as the holder hereof shall designate.
All payments to be made in respect of principal, interest or other
amounts due from Maker under this Note shall be payable on the day when due
without presentation, demand, protest or notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue.
In connection with this Note, Maker has delivered, or has caused to be
delivered, to Lender that certain Promissory Note of Maker in favor of Lender in
the original principal amount of $2,000,000 dated as of the date of this Note
(the "$2,000,000 Note"), that certain Guaranty and Suretyship Agreement of each
of the Guarantors (as defined in the Security Agreement) (the "Guaranty") that
certain Security Agreement of Maker in favor of Lender dated as of the date of
this Note (the "Security Agreement", and together with the Note, the Agreement,
the $2,000,000 Note, the Guaranty, and all other agreements, documents and
instruments in connection therewith, as each of the foregoing may be amended,
modified or supplemented from time to time, the "Loan Documents"). This Note is
secured by, and is entitled to the benefits of, the Loan Documents.
Maker shall be in default under this Note upon the occurrence of any
of the following (the "Events of Default"):
(a) Maker fails to pay any principal or interest due on this Note or
any other amount due and payable under this Note as and when due;
(b) Maker or any Guarantor fails to perform or observe in any material
respect any other material covenant, agreement or duty contained or referred to
herein or in any Loan Document or in Section 2.1.1(iii) of the Agreement and
such material failure continues for a period of thirty (30) consecutive days;
(c) any material warranty, representation or statement made or
furnished to Lender by or on behalf of Maker in the Stock Purchase Agreement or
any Loan Document proves to have been false or misleading in any material
respect when made or furnished;
(d) Maker sells, encumbers, assigns or otherwise disposes of (whether
in one transaction or in a series of transactions) any of its tangible or
intangible property having an aggregate value in excess of $50,000.00 except in
the ordinary course of Maker's business; provided, however, that the anticipated
sale of four (4) on-board interactive television systems to Celebrity Cruises, a
division of Royal Caribbean International, Inc. for an approximate purchase
price of $2,440,000 (the "Celebrity Sale") shall not constitute an Event of
Default hereunder;
(e) any property of Maker is attached in a legal proceeding which
is not discharged within 30 days;
2.
(f) one or more judgments, decrees or orders for the payment of money
in excess of Fifty Thousand Dollars ($50,000) in the aggregate is rendered
against Maker and such judgment, decree or order is not paid or bonded within 30
days;
(g) there occurs an Event of Default under the $2,000,000 Note prior
to the Approval Date (as such term is defined in the $2,000,000 Note);
(h) there occurs dissolution, termination of existence, charter
revocation or forfeiture, insolvency, liquidation, reorganization, arrangement,
adjustment, compensation or other similar relief, business failure, assignment
for the benefit of creditors, or the commencement of proceedings under any law
relating to bankruptcy, insolvency, relief of debtors or protection of
creditors, termination of legal entities or any other similar law now or in the
future in effect, or a proceeding shall be instituted in respect of Maker
seeking appointment of a receiver, trustee, custodian, liquidator, assignee,
sequestrator or other similar official for the Maker or for all or any
substantial part of its property by or against Maker or any surety of any of the
obligations of Maker; or
(i) the Maker shall become insolvent, shall become generally unable to
pay its debts as they become due, shall voluntarily suspend transaction of its
business, shall make a general assignment for the benefit of creditors, shall
institute a proceeding described above or shall consent to any order for relief,
declaration, finding or relief described in (h) above, shall institute a
proceeding described in (h) above or shall consent to the appointment or to the
taking of possession by any such official of all or any substantial part of its
property whether or not any proceeding is instituted, dissolves, winds-up or
liquidates itself or any substantial part of its property, or shall take any
action in furtherance of any of the foregoing.
Upon the occurrence of any of the Events of Default described in
clauses (a) through (g) Lender may declare all liabilities and obligations of
Maker to Lender under the Loan Documents, including those evidenced by the Note,
immediately due and payable and the same shall thereupon become immediately due
and payable without any further action on part of Lender, and upon the
occurrence of any event of default described in clauses (h) and (i) hereof, all
liabilities and obligations of Maker to Lender under the Loan Documents,
including those evidenced by the Note, shall immediately become due and payable
without any action upon the part of Lender.
Maker hereby consents and agrees that Xxxxxx may do any of the
following, upon the occurrence of an Event of Default, as many times as Lender
may agree, desire or permit, without in any way impairing, reducing, limiting,
terminating, or releasing, in whole or in part, the unlimited and continuing
liability of Maker hereunder, without any notice to
3.
Maker (all of which notices are hereby waived by Maker), without incurring any
responsibility to Maker, and without the endorsement or execution by Maker of
any additional consent or waiver:
(a) settle, compound, collect, liquidate, purchase, postpone,
compromise, accept partial payment on, or release any Collateral (as
defined in the Security Agreement) in any manner or subordinate the payment
of all or any part thereof to the payment of any liability (whether due or
not) of Maker to its creditors;
(b) exercise or refrain from exercising any rights, claims or
demands against, and release or discharge, any maker, endorser, surety,
guarantor or any other person or entity directly, indirectly, or otherwise
obligated, including any persons or entities against whom the undersigned
may have a right of recourse, regardless of whether rights are specifically
reserved against any person or entity not released or discharged; and
(c) generally act and deal with Maker and the Collateral in any
manner that Lender may see fit, without notice to any of the undersigned.
Time is of the essence with respect to the payment of this Note.
After the principal amount of any part of the loan evidenced by this
Note (the "Loan") shall have become due (at maturity, by acceleration or
otherwise) and before and after judgment, or upon the occurrence of one or more
of the Events of Default, as compensation to the Lender for the increased cost
of administering the Loan, the Loan will bear interest for each day until paid
(before and after judgment) at a rate which will be equal to 10% per annum.
Interest on the unpaid principal amount hereof shall be computed on
the basis of a 360 day year and the actual number of days elapsed in the period
during which it accrues.
In the event the rates of interest provided for herein or any of them
are finally determined by any governmental authority to exceed the maximum rate
of interest permitted by applicable usury or similar laws, their or its
application will be suspended and there will be charged instead the maximum rate
of interest permitted by such laws.
Interest on the Loan shall accrue until maturity. After maturity of
any part of the Loan (at maturity, by acceleration or otherwise), interest on
such part of the Loan will be due and payable on demand.
All payments to be made in respect of principal, interest, fees or
other amounts due under this Note are payable at 12:00 noon, Pittsburgh time, on
the day when due, without
4.
presentment, demand, protest or notice of any kind, all of which are expressly
waived, and an action for the payments will accrue immediately. All such
payments must be made to the Lender in U.S. dollars and in funds immediately
available, without setoff, counterclaim or other deduction of any nature. All
such payments shall be applied at the option of the Lender to late charges,
accrued and unpaid interest, outstanding principal and other sums due under this
Note in such order as the Lender, in its sole discretion, shall elect.
Maker may prepay any amounts due under this Note, at any time without
premium or penalty. Payments made hereunder shall be credited first to late
charges, then to lawful charges then accrued and the remainder to principal.
If this Note is not paid when due and is placed with an attorney for
collection, and whether or not suit is entered hereon or judgment confessed
against the undersigned, the Maker further agrees to pay the holder hereof, in
addition to the principal and accrued interest, the costs of suit and reasonable
attorney's fees.
MAKER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF
RECORD WITHIN THE UNITED STATES OR ELSEWHERE AFTER THE OCCURRENCE OF AN EVENT
OF DEFAULT TO APPEAR FOR THE UNDERSIGNED AND, WITH OR WITHOUT INITIAL:
COMPLAINTFILED AND WITH OR WITHOUT DECLARATION, CONFESS JUDGMENT /s/RWT
AGAINST IT IN FAVOR OF LENDER OR ANY HOLDER HEREOF FOR THE ABOVE ________
SUM IF NOT PAID WHEN DUE, TOGETHER WITH COSTS OF SUIT AND ATTORNEY'S FEES OF TEN
PERCENT (10%) FOR COLLECTION HEREINAFTER PROVIDED FOR, WITH RELEASE OF ERRORS,
WITHOUT ANY STAY OF EXECUTION OR RIGHT OF APPEAL. NO SINGLE EXERCISE OF THE
FOREGOING POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST MAKER SHALL BE DEEMED
TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY THE
COURT TO BE INVALID, VOIDABLE OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED
AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE HOLDER HEREOF SHALL
ELECT, UNTIL SUCH TIME AS THE HOLDER SHALL HAVE RECEIVED PAYMENT IN FULL OF ALL
PRINCIPAL, INTEREST THEREON, AND COSTS. IF A COPY OF THIS NOTE, VERIFIED BY
AFFIDAVIT OF LENDER OR ANY HOLDER HEREOF OR SOMEONE ON XXXXXX'S OR SUCH HOLDER'S
BEHALF IS FILED IN SUCH ACTION, IT WILL NOT BE NECESSARY TO FILE THE ORIGINAL
NOTE AS A WARRANT OF ATTORNEY.
MAKER WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY INITIAL:
IN CONNECTION WITH ANY PROCEEDING INVOLVING OR /s/RWT
UNDERTAKEN IN CONNECTION WITH THIS NOTE. ________
5.
ACKNOWLEDGMENT
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BY SIGNING THIS INSTRUMENT, MAKER XXXXXX ACKNOWLEDGES, REPRESENTS AND
WARRANTS THAT (A) MAKER HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION INITIAL:
WITH THE EXECUTION AND DELIVERY OF THIS NOTE, (B) MAKER HAS READ, /s/RWT
UNDERSTOOD AND AGREES TO THE PROVISIONS CONTAINED HEREIN, INCLUDING ________
THE CONFESSION OF JUDGMENT PROVISION WHICH MAY RESULT IN A COURT JUDGMENT
AGAINST MAKER WITHOUT NOTICE OR A HEARING, (C) MAKER'S COUNSEL HAS SUFFICIENTLY
EXPLAINED THE LEGAL AND ECONOMIC SIGNIFICANCE OF THE CONFESSION OF JUDGMENT
PROVISION OF THIS NOTE, AND (D) MAKER'S EXECUTION AND DELIVERY OF THIS NOTE IS A
VOLUNTARY ACT.
The successors and assigns of Maker shall be bound by the terms
hereof; Maker may not assign or delegate its rights or obligations hereunder
without the prior written consent of Xxxxxx.
So long as this Note is outstanding, Xxxxxx shall have the right to
examine and inspect, and make copies thereof, Maker's books and records,
including, without limitation, books of account.
Demand, presentment, protest and notice of dishonor and notice of
default are hereby waived.
This Note shall be governed by, and construed in accordance with, the
internal laws of the Commonwealth of Pennsylvania.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP CERTAIN CONSTITUTIONAL
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RIGHTS TO NOTICE AND COURT TRIAL OR OTHER OPPORTUNITY TO BE HEARD INITIAL
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BEFORE A JUDGMENT CAN BE ENTERED AGAINST YOU. IF YOU ARE IN DEFAULT /s/RWT
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OF THE TERMS OF THIS NOTE, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT
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YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
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AND YOUR ASSETS REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE HOLDER OF THIS
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NOTE FOR FAILURE ON HIS OR ITS PART TO COMPLY WITH THE NOTE, OR ANY OTHER CAUSE.
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6.
WITNESS the due execution and sealing hereof, with the intent to be
legally bound hereby.
ATTEST: ALLIN COMMUNICATIONS CORPORATION
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Title:
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Title:
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7.
