SECURED PROMISSORY NOTE
Exhibit 10.2
Exhibit
10.2
FORM
OF
SECURED
PROMISSORY NOTE
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$_________________
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_______,
20__
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Salt
Lake City, Utah
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For value
received XXXXX BROTHERS AVIATION, INC., a Utah corporation having an address at
0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx X, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Company"). promises
to pay to ______________________, a ________________________, or its assigns
(the "Lender"),
the principal sum of _____________________DOLLARS and NO/100 ($________),
together with interest on the unpaid principal balance hereof at the rate and at
the times set forth herein.
This
Secured Promissory Note (the "Note") is issued
pursuant to that certain Note Purchase Agreement (the "Purchase Agreement")
dated as of October 9, 2008 by and among the Company and the Lender, and is
subject to the terms and conditions contained therein. The obligations hereunder
arc secured by that certain Security Agreement and Intellectual Property
Security Agreement, each entered into as of October 9, 2008 by and among the
Company and the Lender. Capitalized terms used but not defined herein shall have
the meanings set forth in the Purchase Agreement.
1.
Payment of Interest.
Interest shall accrue on the unpaid principal balance of this Note at the rate
of fifteen percent (15.0%) per annum, simple interest. All accrued and unpaid
interest shall be payable on the Maturity Date (as defined below). Upon and
during the occurrence of and during the continuance of an Event of Default (as
defined below), the unpaid principal balance of this Note shall bear interest,
from the xxxx of the occurrence of such Event of Default until such Event of
Default is cured or waived, payable on demand in immediately available funds, at
a rate equal to eighteen percent (18.0%) per annum.
2.
Payment of Principal.
The entire outstanding principal balance of this Note, together with all accrued
and unpaid interest and all other amounts due hereunder, shall be due and
payable on April 9, 2009 (the "Maturity
Date'").
3.
Manner of Payment.
All sums payable under this Note shall be paid in lawful money of the United
States of America and in immediately available funds. Payments shall be made to
the Lender at ___ _____________________________________(or at such other address
or by wire transfer to such account as shall, in either case, be specified by
the Lender to the Company at least five (5) days prior to the relevant payment
date). If any payment under this Note shall become due on a Saturday, Sunday or
a bank or legal holiday, such payment shall be due on the next succeeding
business day.
4.
Prepayment. Company
may, at its option, prepay this Note, in whole or in part, at any time and from
time to time, without premium or penalty upon one (1) day prior written notice
to Lender.
5.
Late Charges. If any
sum of money required to be paid by the terms of this Note is not paid within
ten (10) days after the same becomes due, then the Company will pay a late fee
equal to five percent (5%) of the overdue payment. The Company will pay this
late fee promptly, but only once on each late payment.
6.
Events of
Default. The occurrence of any of the following events shall constitute
an "Event of
Default" under this Note:
i.
failure to pay when due any payment of principal,
interest or other amount due and owing
under this Note on or before the date such payment is due;
ii.
Borrower becomes the subject of
any Bankruptcy proceeding, or is declared Bankrupt,
while this Note is still outstanding. "Bankruptcy" shall
mean (i) the adjudication of Borrower as bankrupt or insolvent, (ii) the
institution by or against Borrower of a petition for arrangement or of any other
type of insolvency proceeding under the United States Bankruptcy Code, as
amended (but, with respect to an involuntary proceeding, only if such proceeding
is not discharged within 60 days), (iii) the making by Borrower of a general
assignment for the benefit of creditors, (iv) the appointment of a liquidator,
administrator, receiver or trustee in bankruptcy of Borrower or its assets or
(v) the taking, making or institution of any like or similar act or proceeding
involving Borrower;
iii. the
Lender determines that there has been a material adverse change in Borrower,
Xxxxxxxx's
financial condition or Xxxxxxxx's business prospects;
iv. Borrower
breaches any of the material covenants, conditions, promises or agreements
contained in this Note or the Purchase Agreement;
v.
the occurrence of any breach, default or "event of default" as defined or
described
in any other now existing or future promissory note or other instrument, or any
guaranty, mortgage or security agreement, representing or securing indebtedness
of Borrower (or any of its Affiliates) to Lender (or any of its
Affiliates).
"Affiliate" means,
with respect to any person or entity, any person or entity controlling,
controlled by or under common control with the specified person or entity.
"Control." for
the foregoing purposes, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether through the ownership of voting securities or voting
interests, by contract or otherwise.
7.
Remedies. Upon the
maturity of this Note (whether at the stated Maturity Date, by acceleration or
otherwise), all amounts due under this Note, including the unpaid balance of
principal and interest hereof, shall, at the option of the Lender (but
automatically with respect to an Event of Default described in Section 6(ii)),
become immediately due and payable, and the Lender may exercise any of its
rights and remedies granted herein, under applicable law or that the Lender may
otherwise have against Borrower. Such remedies shall be cumulative and
concurrent and may be pursued singly, successively or together, in Xxxxxx's sole
and absolute discretion and as often as occasion therefor shall arise. Failure
by the Lender to exercise any of its remedies shall not constitute a waiver of
the right to exercise the same at any subsequent time.
8.
Cross Collateralization:
Obligations Recourse to Borrower.
i.
All property mortgaged, pledged or otherwise provided as
security (collectively, "Collateral'") for
repayment of any other note, liability or obligation of any kind or nature,
whether now or hereafter in existence and whether now or hereafter held by
Xxxxxx, or any of its Affiliates, that is signed, cosigned, guaranteed or
endorsed by any party who has signed, cosigned, guaranteed or endorsed this Note
(or by any Affiliate of any such party) ("Other Indebtedness"')
shall stand as collateral for repayment of tins Note and for performance of all
obligations hereunder. In addition, all Collateral provided as security for the
Borrowers' obligations under this Note shall stand as collateral for repayment
of all Other Indebtedness and for performance of all obligations
thereunder.
ii. Notwithstanding
any security and/or guarantees that may be provided for this Note,
this Note shall be recourse to the Borrower such that the Lender may seek to
enforce against the Borrower any monetary judgment with respect to the sums due
under this Note.
9. Collection Costs.
Borrower hereby agrees to pay all costs and expenses of collection of this Note
that are paid or incurred by the Lender (including, without limitation, the fees
and all disbursements of the Lender's attorneys) (collectively, "Collection Costs"!
irrespective of whether an action has been commenced against
Borrower.
10.
No Usury. In no
contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof or otherwise, shall the amount paid or agreed to be paid to
Lender for the use, forbearance or detention of money advanced hereunder exceed
the highest lawful rate permissible under any law which a court of competent
jurisdiction may deem applicable hereto; and, in the event of any such payment
inadvertently paid by the Company or inadvertently received by Lender, such
excess sum shall be, at the Company's option, returned to Company forthwith or
credited as a payment of principal, but shall not be applied to the payment of
interest. It is the intent hereof that the Company not pay or contract to pay,
and that Lender not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by the
Company under applicable law.
11.
Miscellaneous.
i.
This Note may be amended or modified only by
an instrument in writing signed by the
Company and the Lender.
ii. All
payments under this Note shall be applied first to Collection Costs, next to
accrued
interest and thereafter to principal.
iii. Presentment,
demand, protest and other notice of any kind are hereby expressly waived by
the Company.
i
v. No delay or
omission on the part of the Lender in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, and no partial exercise of any
right or remedy precludes other or further exercise thereof or the exercise of
any other rights or remedy.
v. If
any provision of this Note is invalid and unenforceable in any jurisdiction,
then, to
the fullest extent permitted by law, (a) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Lender in order to carry out the purposes of this Note
as nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
vi. This
Note shall be jointly and severally binding upon the Company and its
successors
and assigns.
vii. THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND/OR ANY
DOCUMENT EXECUTED IN CONJUNCTION HEREWITH AND/OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WIIETHER ORAL OR WRITTEN) OR ACTIONS OF
OR BY THE COMPANY OR THE LENDER.
This Note
shall be construed in accordance with, and be governed by, the internal laws of
the State of New York, without giving effect to the choice of law principles
thereof.
[Signature
appears on following page]
IN
WITNESS WHEREOF, the Company has caused this Note to be executed the day and
year first above written.
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XXXXX
BROTHERS AVIATION, INC.
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By
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Name:
Xxxxx Xxxxx
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Title:
President & CEO
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Exhibit
10.2 Cont’x
Xxxxx
Brothers Aviation, Inc.
Schedule
of Promissory Notes Issued Under the Note Purchase Agreement Dated October 9,
2008
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Date
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Lender
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Principal
Amount
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October
9, 2008
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Westford
Special Situations Master Fund L.P.
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$482,460.00
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October
9, 2008
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Westford
Special Situations Fund II, L.P.
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17,415.00
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October
9, 2008
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Westford
Special Situations Fund II Ltd.
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145,125.00
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November
5, 2008
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Westford
Special Situations Master Fund L.P.
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194,480.00
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November
5, 2008
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Westford
Special Situations Fund II, L.P.
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7,020.00
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November
5, 2008
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Westford
Special Situations Fund II Ltd.
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58,500.00
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December
4, 2008
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Westford
Special Situations Master Fund L.P.
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201,960.00
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December
4, 2008
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Westford
Special Situations Fund II, L.P.
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7,290.00
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December
4, 2008
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Westford
Special Situations Fund II Ltd.
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60,750.00
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February
2, 2009
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Westford
Special Situations Master Fund L.P.
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181,260.00
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February
2, 2009
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Westford
Special Situations Fund II, L.P.
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6,615.00
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February
2, 2009
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Westford
Special Situations Fund II Ltd.
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55,125.00
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February
24, 2009
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Westford
Special Situations Master Fund L.P.
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22,440.00
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February
24, 2009
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Westford
Special Situations Fund II, L.P.
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810.00
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February
24, 2009
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Westford
Special Situations Fund II Ltd.
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6,750.00
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March
25, 2009
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Westford
Special Situations Master Fund L.P.
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325,380.00
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March
25, 2009
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Westford
Special Situations Fund II, L.P.
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11,745.00
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March
25, 2009
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Westford
Special Situations Fund II Ltd.
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97,875.00
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April
22, 2009
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Westford
Special Situations Master Fund L.P.
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160,072.00
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April
22, 2009
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Westford
Special Situations Fund II, L.P.
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5,778.00
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April
22, 2009
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Westford
Special Situations Fund II Ltd.
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48,150.00
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June
1, 2009
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Westford
Special Situations Master Fund L.P.
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163,064.00
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June
1, 2009
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Westford
Special Situations Fund II, L.P.
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5,886.00
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June
1, 2009
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Westford
Special Situations Fund II Ltd.
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49,050.00
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July
21, 2009
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Westford
Special Situations Master Fund L.P.
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165,000.00
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August
6, 2009
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Westford
Special Situations Master Fund L.P.
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220,000.00
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September
15, 2009
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Westford
Special Situations Master Fund L.P.
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170,000.00
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October
13, 2009
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Westford
Special Situations Master Fund L.P.
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180,000.00
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November
10, 2009
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Westford
Special Situations Fund II Ltd.
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280,000.00
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December
22, 2009
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Westford
Special Situations Fund II Ltd.
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210,000.00
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February
15, 2010
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Westford
Special Situations Fund II Ltd.
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390,000.00
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