Exhibit 10.13
FORM OF SECURED PROMISSORY NOTE
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$___________ May __, 1998
FOR VALUE RECEIVED, the undersigned (the "Purchaser") hereby promises
to pay to ▇▇▇▇▇▇ American Investment Corp., a Delaware corporation (the
"Company"), the principal amount of ___________ Dollars ($__________) in lawful
money of the United States of America, payable on May __, 2005, and to pay
interest (computed on the basis of a 365 or 366 day year, as the case may be) on
the unpaid principal amount hereof (including, to the extent permitted by law,
any amounts which are deemed to be principal in accordance with the succeeding
sentence) from and after the date of this Note until the entire principal amount
hereof has been paid in full, at a rate of 5.69% per annum, compounded annually.
All principal of and accrued interest on this Note shall be due and payable in
full on May __, 2005; PROVIDED that if the Purchaser or a Permitted Transferee
(as defined in the Management Common Stock Subscription Agreement, dated as of
May __, 1998, between the Company and the Purchaser (as such agreement may be
amended from time to time, the "Subscription Agreement")) sells or otherwise
disposes of any portion of his Common Stock (as defined below) other than
pursuant to a sale or other disposition to a Permitted Transferee which is
permitted by the Subscription Agreement, then the Net Proceeds (as defined in
Section 2(b) of the Pledge Agreement dated as of the date hereof between the
Purchaser and the Company (the "Pledge Agreement")) shall be applied to the
prepayment first of the accrued and unpaid interest and then to the unpaid
principal amount hereunder, which interest and, as the case may be, principal to
be so prepaid shall become immediately due and payable. Interest shall accrue
from and including the first day hereof to but excluding any such payment date.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Subscription Agreement.
If the date set for payment of principal hereunder is a Saturday or
Sunday or a legal holiday in the State of New York, then such payment shall be
made on the next succeeding business day.
This Note has been delivered as partial payment for the purchase by
the Purchaser of Common Stock, par value $.01 (the "Common Stock"), of the
Company in accordance with the terms of the Subscription Agreement. Payment of
the principal of and interest on this Note is secured pursuant to the terms of
the Pledge Agreement, reference to which is made for a description of the
collateral provided thereby and the rights of the Company and the holder of this
Note in respect of such collateral.
This Note is subject to the following further terms and conditions:
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1. PAYMENT AND PREPAYMENT. (a) All payments and prepayments of
principal of and interest on this Note shall be made to the Company or its
order, or to the legal holder of this Note or such holder's order, in lawful
money of the United States of America at the principal offices of the Company
(or at such other place as the holder hereof shall notify the Purchaser in
writing). Upon final payment of all outstanding principal of and all accrued
interest on this Note it shall be surrendered for cancellation.
(b) The Purchaser may, at its option, prepay the principal of this
Note in whole or in part (and all unpaid interest accrued on such principal to
be prepaid) at any time or from time to time without penalty or premium.
(c) Concurrently with any prepayment of any portion of the principal
of this Note pursuant to this Section 1, the Company (or any other holder of
this Note) shall make a notation of such payment hereon.
2. EVENTS OF DEFAULT. Upon the occurrence of any of the following
events ("Events of Default"):
(a) Failure to pay any principal of or interest on this Note when
due;
(b) An event of default under any note evidencing indebtedness of the
Purchaser to the Company;
(c) Failure of the Purchaser or the Purchaser's Permitted Transferees
to perform such Purchaser's or the Purchaser's Permitted Transferees'
material obligations under the Stockholders' Agreement, the Subscription
Agreement or the Pledge Agreement;
(d) The occurrence (in any order or simultaneously) of both of the
following: (i) termination of the Purchaser's employment with the Company
and its subsidiaries (other than a termination by the Company and its
subsidiaries because of his death, Retirement (as defined in the
Subscription Agreement) or Disability (as defined in the Subscription
Agreement)) and (ii) the sale or other disposition (in one or more
transactions) of all the Common Stock subject to the Pledge Agreement,
other than sales and dispositions to Permitted Transferees; or
(e) The filing of a voluntary or involuntary petition for an order of
relief under the Bankruptcy Code by or against the Purchaser, or any filing
for relief under any state or federal insolvency statute by or against the
Purchaser that, in the case of an involuntary petition or a filing against
the Purchaser, either (A) results in the entry of an order for relief or
(B) remains undismissed, undischarged and unbonded for a period of 60 days;
then (x) if an event set forth in (a) through (d) above occurs, the holder of
this Note may declare, by notice of default given to the Purchaser, the entire
principal amount of this Note to be forthwith due and payable, whereupon the
entire principal amount of this Note
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outstanding hereunder and all accrued and unpaid interest thereon shall become
due and payable without presentment, demand, protest, notice of dishonor and all
other demands and notices of any kind, all of which are hereby expressly waived
and (y) if an event set forth in paragraph (e) above occurs, the entire
principal amount of this Note outstanding hereunder and all accrued and unpaid
interest thereon shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the holder. If an Event of
Default shall occur hereunder, the Purchaser shall pay costs of collection,
including reasonable attorneys' fees, incurred by the Company (or any other
holder of this Note) in the enforcement hereof.
No delay or failure by the Company (or any other holder of this Note)
in the exercise of any right or remedy shall constitute a waiver thereof, and no
single or partial exercise by the holder hereof of any right or remedy shall
preclude other or future exercise thereof or the exercise of any other right or
remedy.
3. LIMITED RECOURSE. The Company (or any other holder of this Note)
shall have recourse against the Common Stock and any other Pledged Securities
(as defined in the Pledge Agreement) of the Purchaser as provided in the Pledge
Agreement and the Net Proceeds referred to in Section 2(b) of the Pledge
Agreement. Except as expressly provided otherwise in the prior sentence,
neither the Company (nor any other holder of this Note) shall have recourse
against the Purchaser or any of the Purchaser's assets for the payment of the
principal of this Note or for any claim based hereon (including costs of
collection) other than the payment of accrued and unpaid interest on this Note.
The Company (or any other holder of this Note) shall have full recourse against
the Purchaser and all of the Purchaser's assets for the payment of accrued and
unpaid interest on this Note.
4. MISCELLANEOUS.
(a) The provisions of this Note shall be governed by and construed
and enforced in accordance with the laws of the State of New York applicable to
contracts made and to be performed therein. The Purchaser hereby (i) agrees to
submit to the exclusive jurisdiction of the federal and state courts located in
the Southern District of New York in any action or proceeding arising out of or
relating to this Note, (ii) waives any objection to the laying of venue of any
actions or proceedings brought in any such court and any claim that such actions
or proceedings have been brought in an inconvenient forum, and (iii) agrees that
service of any process, summons, notice or document by U.S. registered mail to
the address for such party specified in Section 7.6 of the Subscription
Agreement shall be effective service of process for any action or proceeding in
New York with respect to any matter specified above.
(b) Any notices or other communications permitted or required
hereunder shall be in writing and will be deemed to have been duly given if
delivered or sent in accordance with the Subscription Agreement.
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(c) The headings contained in this Note are for reference purposes
only and shall not affect in any way the meaning or interpretation of the
provisions hereof.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Purchaser as of the date first above written.
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