EXHIBIT 10.8
NEI ACQUISITION CORPORATION
Subordinated Note
February 28, 1994 $500,000
NEI Acquisition Corporation, a Texas corporation (the "Maker"), for value
received, hereby promises to pay to Xxxxxx X. Xxxxxx, or assigns (together with
his successors in interest hereinafter referred to as the "Holder"), the sum of
Five Hundred Thousand Dollars ($500,000), together with interest thereon, as
provided for herein. This Note has been issued pursuant to the NonCompetition
Agreement, dated the date hereof, by and between the Maker and the Holder.
Article 1. Payment Dates; Interest Rate.
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(a) The unpaid principal balance of this Note shall be due and
payable as follows: an installment of $100,000 shall be due and payable on
each February 28, commencing February 28, 1995 through February 28, 1999.
(b) Interest on the unpaid balance of this Note shall be payable on
the last day of each February, May, August and November, commencing May 31,
1994, until the unpaid principal balance of this Note has been paid in
full.
(c) Interest shall accrue on the unpaid principal amount of this
Note at an annual rate equal to eight percent (8%). Interest shall be
computed on the basis of a 365 day year for the actual number of days
elapsed. Except as otherwise provided herein, all sums of past-due
principal and interest shall bear interest at the maximum rate of interest
permitted by applicable law.
Article 2. Place and Manner of Payment.
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Payment of the principal of and interest on this Note will be made
at such address as the holder shall advise the Maker in writing from time
to time (provided, that if no such address is furnished, payment shall be
made at the principal office of the Maker), in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts.
Article 3. Optional Redemption.
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The Maker may at any time, subject to the provisions of Article 4,
redeem all or any part of the outstanding principal amount of this Note at
a
redemption price of 100% of the principal amount hereof being redeemed,
plus accrued interest thereon through the date of redemption. Any payments
made pursuant to this Article 3 shall be applied first to accrued interest
and thereafter to principal of this Note.
Article 4. Subordination.
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(a) This Note, to the extent and in the manner hereinafter set
forth, shall be subordinated and subject in right of payment to the prior
payment in full of all principal of and premium, if any, and interest on
Senior Debt (as defined hereinbelow).
(b) No payment on account of principal or interest on this Note
shall be made, nor shall any property or assets be applied to the purchase
or other acquisition or retirement of this Note, if the Maker is at the
time of such payment, purchase, acquisition or retirement delinquent in the
full payment of amounts then due for principal and premium, if any, and
interest on its Senior Debt. Notwithstanding the foregoing, no payment on
account of this Note shall be made if, at the time of such payment or
immediately after giving effect thereto, and as a result thereof, (i) there
shall exist a default in the payment of principal, premium, if any, or
interest with respect to any Senior Debt or (ii) there shall have occurred
an Event of Default (other than a default in the payment of principal,
premium, if any, or interest) with respect to any Senior Debt or in the
instruments or documents pursuant to which the same is outstanding,
permitting the holders thereof to accelerate the maturity thereof, and such
Event of Default shall not have been cured or waived in writing by all
holders of Senior Debt.
(c) Upon (i) any acceleration of the principal amount due on this
Note pursuant to the terms of this Note or (ii) any payment or distribution
of assets of the Maker of any kind or character, whether in cash, property
or securities, to the creditors upon any dissolution or winding up or total
or partial liquidation or reorganization of the Maker, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal, premium, if any, and interest due or to become
due upon all Senior Debt shall first be paid in full, or payment thereof
provided for in money or money's worth, before the Holder shall be entitled
to retain any assets so paid or distributed in respect thereof; and upon
any such dissolution or winding up or liquidation or reorganization, any
payment or distribution of assets of the Maker of any kind or character,
whether in cash, property or securities, to which the Holder would be
entitled, except for these provisions, shall be held in trust for, and
shall be paid by the Maker to any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution,
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or to the holder or holders of Senior Debt or their representatives, to the
extent necessary to pay all Senior Debt in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holder of such Senior Debt, before any payment or distribution is made to
the holder of this Note.
(d) Nothing contained in these provisions shall prevent the Maker
from making and the Holder of this Note from accepting and retaining
payment of the principal of and interest on this Note at any time except
under the conditions described in the preceding paragraphs of this Article
4. Nothing contained in these provisions is intended or shall impair as
between the Maker, its creditors other than the holders of Senior Debt, and
the Holder, the obligation of the Maker, which shall be absolute and
unconditional, to pay to the Holder the principal and interest on this
Note, as and when the same shall become due and payable in accordance with
its terms, or to affect the relative rights of the holder of this Note and
creditors of the Maker other than the holders of Senior Debt, nor shall
anything herein prevent any holder of this Note from exercising all
remedies otherwise permitted by applicable law, upon default, subject to
the rights, if any, under these provisions of the holders of Senior Debt in
respect of cash, property or securities of the Maker received upon the
exercise of any such remedy.
(e) "Senior Debt" shall mean all indebtedness of the Maker and its
subsidiaries for borrowed money to commercial banks or similar financial
institutions (or any renewals, extensions or replacements of any of the
foregoing).
(f) As long as this note remains outstanding, the Maker and its
subsidiaries will not incur or become liable with respect to any
indebtedness for borrowed money which is subordinate or junior in right of
payment to any Senior Debt, if such indebtedness is, or purports to be,
senior in right of payment to this Note.
Article 5. Default.
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(a) "Event of Default", wherever used herein, means any one of the
following events:
(1) default by the Maker in the payment of any principal or
interest payment, and such default shall have continued for a period
of three days after its due date; or
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(2) the entry of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Maker or a
subsidiary in an involuntary case under the federal bankruptcy laws,
as now or hereafter constituted or other applicable federal or state
bankruptcy, insolvency or other similar law, or the consent by it or
a subsidiary to the appointment to or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) of the Maker or a subsidiary or for any
substantial part of its or their respective properties, or the
making by either of them of any assignment for the benefit of
creditors, or the admission by either of them in writing of its
inability to pay its debts generally as they become due; or
(3) obligations in an aggregate amount in excess of $100,000
of the Maker and its subsidiaries, whether as principal, guarantor,
surety, or other obligor, for the payment of any indebtedness (i)
shall become or shall be declared to be due and payable prior to the
express maturity thereof, or (ii) shall not be paid when due or
within any grace period for the payment thereof, or (iii) the holder
of such obligation shall have the right immediately to declare the
indebtedness evidenced thereby due and payable prior to its stated
maturity unless such failure or default is absolutely and
unconditionally waived by and on behalf of the holders of such
obligations or is discharged within five days by payment.
(b) If an Event of Default occurs, then and in every such case the
Holder may declare the principal of such Note to be due and payable
immediately, by a notice in writing to the Maker, and upon any such
declaration such principal shall become immediately due and payable except
if any Event of Default occurs under paragraph 6 above, the Note shall
become immediately due and payable without declaration or notice to the
Maker.
(c) The Maker expressly waives all notices, demands for payment,
presentations for payment, notices of intention to accelerate maturity,
protest and notice of protest, and any other notices of any kind as to this
Note and as to each, every and all installments or part payments thereof,
and consents that the Holder may at any time and from time to time, upon
request of or by agreement with the Maker, extend the date of maturity
hereof or change the time or method of payments hereof without notice to
any of the other makers, sureties or endorsers, who shall remain bound for
the payment hereof.
Article 6. Collection Fees. In the event of default hereunder, or if this
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Note is collected by suit or legal proceedings or through bankruptcy
proceedings, the Maker agrees to pay in addition to all sums then due hereon,
including principal and interest, all reasonable expenses of collection,
including reasonable attorneys' fees.
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Article 7. Amendments and Waivers. This Note may be amended by written
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agreement of the Maker and the Holder. No waiver of the provisions hereof shall
be effective unless agreed to in writing by the party against whom such waiver
is asserted.
Article 8. Governing Law. This Note shall be deemed to be a contract made
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under the laws of the State of Texas, and for all purposes shall be governed by
and construed in accordance with the laws of the State of Texas, exclusive of
any such law under which the law of any other jurisdiction would apply.
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed on
the 28th day of February, 1994.
NEI Acquisition Corporation
By:
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Xxxxx X. Xxxxxx
Chairman
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