EXHIBIT 10.7
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
OR, IF APPLICABLE, STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO XXXXXX.XXX, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
NOTE
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FOR VALUE RECEIVED, Xxxxxx.xxx, Inc. a Delaware corporation
(the "Borrower"), hereby promises to pay to Xxxxx-XxXxxxx Investors, L.P., a
Delaware limited liability company (the "Holder") or order, without demand, the
sum of FOUR THOUSAND SIX HUNDRED DOLLARS ($4,600) with interest at the rate of
10% per annum. The principal amount of the Note shall be due and payable on
February 11, 2005 (the "Maturity Date").
The following terms shall apply to this Note:
ARTICLE I
PAYMENT
1.1 Payment of Interest. Interest shall be paid quarterly in
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arrears commencing on May 11, 2003.
1.3 Maturity. On the Maturity Date, the entire principal
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amount and any unpaid accrued interest shall be paid to the Holder without
offset or deduction of any kind.
1.4 Prepayment. Any prepayment shall include all accrued
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interest to the date of such prepayment. This Note may be prepaid without
penalty prior to the Maturity Date upon at least 15 days notice.
ARTICLE II
EVENTS OF DEFAULT
2.1 Events of Default. The occurrence of any of the following
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events of default ("Event of Default") shall, at the option of the Holder
hereof, make the principal balance then remaining unpaid hereon and all other
amounts payable hereunder immediately due and payable, all without demand,
presentment or notice, or grace period, all of which hereby are expressly
waived, except as set forth below:
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(a) Failure to Pay Principal and/or Interest. The Borrower
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fails to pay any installment of principal or interest hereon when due and such
failure continues for a period of ten (10) days after the due date.
(b) Breach of Covenant. The Borrower breaches any material
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covenant or other term or condition of this Note, the Note Purchase Agreement
entered into by the Holder and Borrower in connection with this Note (the "Note
Purchase Agreement"), and the Intercreditors Agreement, each dated as of the
date hereof, (together with the Note Purchase Agreement, collectively, the
"Transactional Documents") in any material respect and such breach, if subject
to cure, continues for a period of ten (10) days after written notice to the
Borrower from the Holder.
(c) Breach of Representations and Warranties. Any material
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representation or warranty of the Borrower made herein in any Transactional
Document shall be false or misleading in any material respect.
(d) Receiver or Trustee. The Borrower shall make an assignment
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for the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business; or such a receiver or trustee shall otherwise be appointed.
(e) Judgments. Any money judgment, writ or similar final
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process, shall be entered or filed against Borrower or any of its property or
other assets for more than $500,000, and shall remain unvacated, unbonded or
unstayed for a period of forty-five (45) days.
(f) Bankruptcy. Bankruptcy, insolvency, reorganization or
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liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Borrower and if instituted against Borrower are not dismissed within 60 days of
initiation.
(g) Cross Default. The Company shall default in any of its
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obligations under any mortgage, indenture or instrument, other than the lease
for the premises located at 0000 XxXxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx,
under which there may be issued any indebtedness of the Company in an amount
exceeding $500,000 and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
become due and payable.
2.2 Enforcement. Upon the occurrence of any Event of Default,
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the Holder may thereupon proceed to protect and enforce its rights either by
suit in equity and/or by action at law or by other appropriate proceedings
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Note or in aid of the exercise of any
power granted in this Note, and proceed to enforce the payment of this Note held
by it, and to enforce any other legal or equitable right of such Holder.
2.3 Waiver; Release. Except as expressly provided for herein,
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the Company specifically (i) waives all rights it may have (A) to notice of
nonpayment, notice of default, demand, presentment, protest and notice of
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protest with respect to any of the obligations hereunder and (B) to notice of
acceptance hereof or of any other action taken in reliance hereon, notice and
opportunity to be heard before the exercise by the Holder of the remedies of
self-help, set-off, or other summary procedures and all other demands and
notices of any type or description except for cure periods; and (ii) releases
the Holder, its officers, directors, agents, employees and attorneys from all
claims for loss or damage caused by any act or failure to act on the part of the
Holder, its officers, attorneys, agents, directors and employees except for
gross negligence or willful misconduct.
2.4 Intercreditors Agreement. Notwithstanding anything herein
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to the contrary, all of Holder's rights hereunder shall be subject to the terms
of the Intercreditors Agreement dated as of the date hereof among Holder, the
Borrower and other holders of notes of the Borrower of which this Note is part
of a series of notes. To the extent of any conflict between the Intercreditors
Agreement and this Note, the provisions of the Intercreditors Agreement shall
prevail.
ARTICLE III
MISCELLANEOUS
3.1 Failure or Indulgence Not Waiver. No failure or delay on
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the part of Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
3.2 Notices. Any notice herein required or permitted to be
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given shall be in writing and may be personally served or sent by fax
transmission (with copy sent by certified or registered mail or by overnight
courier). For the purposes hereof, the address and fax number of the Holder is
as set forth on the first page hereof. The address and fax number of the
Borrower shall be 0000 XxXxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
facsimile number: (000) 000-0000. Both Xxxxxx and Borrower may change the
address and fax number for service by service of notice to the other as herein
provided.
3.3 Amendment Provision. The term "Note" and all reference
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thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.
3.4 Assignability. This Note shall be binding upon the
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Borrower and its successors and assigns, and shall inure to the benefit of the
Holder and its successors and assigns, and may be assigned by the Holder.
3.5 Cost of Collection. If default is made in the payment of
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this Note, Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys' fees.
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3.6 Maximum Payments. Nothing contained herein shall be deemed
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to establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.
3.7 Governing Law and Venue. This Note shall be governed by
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and interpreted in accordance with the laws of the State of California without
regard to the principles of conflict of laws. In the event of any litigation
regarding the interpretation or application of this Note, the parties
irrevocably consent to jurisdiction in any of the state or federal courts
located in the City of Los Angeles, State of California and waive their rights
to object to venue in any such court, regardless of the convenience or
inconvenience thereof to any party. Service of process in any civil action
relating to or arising out of this Agreement or the transaction(s) contemplated
herein may be accomplished in any manner provided by law. The parties hereto
agree that a final, non-appealable judgment in any such suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be signed in its
name by its President on this 11th day of February, 2003.
XXXXXX.XXX, INC.
By: /S/Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: President
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