Exhibit 10.25
TERM NOTE
$2,021,875.00 Dallas, Texas October 22, 1998
FOR VALUE RECEIVED, Xxxxxx X. Xxxxxxxx, an individual, referred to herein
as "Borrower", promises to pay to the order of CompuCom Systems, Inc., a
Delaware corporation and referred to herein as "Lender", the principal sum of
Two Million, Twenty-one Thousand, Eight Hundred, Seventy-five Dollars
($2,021,875.00), together with interest on the unpaid principal balance as set
forth below. All sums hereunder are payable to Lender at its principal office in
Dallas, Dallas County, Texas.
1. Definitions. Unless the context hereof otherwise requires or provides,
the terms used herein defined in that certain Pledge Agreement between Borrower
and Lender dated October 22, 1998, as the same has been or may be amended or
supplemented from time to time (the "Agreement") have the same meanings. In
addition, the following terms shall have the following meanings:
a. "Prime Rate" means that variable rate of interest per annum
established by BankAmerica Corp. (the "Bank") from time to time as its "prime
rate" (whether by that or any other name). The Bank sets such rate as a general
reference rate of interest and takes into account such factors as the Bank may
deem appropriate. Many of the Bank's commercial or other loans are priced in
relation to such rate, but it is not necessarily the lowest or best rate
actually charged to any customer.
b. "Maximum Rate" means the higher of the maximum interest rate
allowed by applicable United States or Texas law as amended from time to time
and in effect on the date for which a determination of interest accrued
hereunder is made. The determination of the maximum rate permitted by applicable
Texas law shall be made pursuant to the weekly ceiling as described in
Tex.Rev.Civ.Stat.Xxx. art. 5069-ID.003, but Lender reserves the right to
implement from time to time any other rate ceiling permitted by such law.
2. Interest Rate.
a. The unpaid principal balance from the date hereof until maturity
(whether by acceleration or otherwise) shall bear interest at a rate per annum
equal to 5.1%.
b. All past-due payments of principal and interest under this Note
shall bear interest at the Maximum Rate (or if there is no such Maximum Rate,
then at the Prime Rate plus 3%) from maturity until paid.
3. Payment of Principal and Interest.
a. The principal amount outstanding under this Note shall be due and
payable on October 22, 2003. Interest shall be payable annually on October 22nd
of each year during the term hereof, commencing October 22, 1999, and upon
payment of this Note in full.
b. Unless Lender in its sole discretion elects to apply payments
differently, each payment shall be first credited to the discharge of interest
accrued on the unpaid principal balance to the date
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of the payment, and the remainder shall be credited to the reduction of said
principal.
c. The principal and interest due hereunder shall be evidenced by
Xxxxxx's records which, absent manifest error, shall be conclusive evidence of
the computation of principal and interest balances owed by Xxxxxxxx to Lender.
d. Notwithstanding anything contained in this Note or in the
Agreement to the contrary, in the event Xxxxxxxx's employment with Lender is
terminated, whether such termination is voluntary or involuntary, this Note
shall be due and payable on the 30th day immediately following the effective
date of such termination. In the event this Note becomes payable pursuant to the
terms of this Section 3(d), Borrower at his option may elect to have Lender
offset any amounts owed to Lender by Borrower under this Note against any
severance or other payments to be made by Lender to Borrower as a result of
Xxxxxxxx's termination of employment with Lender.
4. Default. Failure to pay this Note or any installment hereunder as it
becomes due, or failure of Borrower or any other person to perform (after the
expiration of any applicable cure period) any of the terms or provisions set
forth in, or the occurrence of any default under the terms of the Agreement, or
the occurrence of any default under any other agreement between Borrower and
Lender shall, at the election of the holder hereof, without notice, demand or
presentment, notice of intent to accelerate or notice of acceleration, all which
are hereby waived, mature the principal of this Note and all interest then
accrued, and the same shall at once become due and payable and subject to those
remedies of the holder hereof.
5. Prepayment. Borrower may at any time prepay in whole or in part the
unpaid principal of this Note without premium or penalty, and the interest shall
immediately cease on any amounts so prepaid.
6. Waiver. Each surety, endorser, guarantor and any other party now or
hereafter liable for the payment of this Note in whole or in part ("Surety") and
Borrower hereby severally (a) waive grace, demand, presentment for payment,
notice of nonpayment, protest, notice of protest, non-payment or dishonor,
notice of intent to accelerate, notice of acceleration and all other notices
(except as provided in the Agreement), filing of suit and diligence in
collecting this Note or enforcing any other security with respect to same, (b)
agree to any substitution, surrender, subordination, waiver, modification,
change, exchange or release of any security or the release of the liability of
any parties primarily or secondarily liable hereon, (c) agree that Lender is not
required first to institute suit or exhaust its remedies hereon against
Borrower, any Surety or others liable or to become liable hereon or to enforce
its rights against them or any security with respect to same or to join any of
them in any suit against any others of them, and (d) consent to any extension or
postponement of time of payment of this Note and to any other indulgence with
respect hereto without notice thereof to any of them. No failure or delay on the
part of Lender in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
7. Attorneys' Fees. If this Note is not paid at maturity, regardless of
how such maturity may be brought about, or is collected or attempted to be
collected through the initiation or prosecution of any suit or through any
probate, bankruptcy or any other judicial proceedings, or is placed in the hands
of an attorney for collection, Borrower shall pay, in addition to all other
amounts owing hereunder, all actual expenses of collection, all court costs and
reasonable attorney's fees incurred by the holder hereof.
8. Limitation on Agreements. All agreements between Borrower and Lender,
whether now existing or hereafter arising, are hereby limited so that in no
event shall the amount paid, or agreed to be paid to Lender for the use,
forbearance, or detention of money or for the payment or performance of any
covenant or obligation contained herein or in any other document evidencing,
securing or pertaining to this Note, exceed the Maximum Rate. If any
circumstance otherwise would cause the amount paid to exceed the Maximum Rate,
the amount paid or agreed to be paid to Lender shall be reduced to the Maximum
Rate, and
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if Lender ever receives interest which otherwise would exceed the Maximum Rate,
such amount which would be excessive interest shall be applied to the reduction
of the principal of this Note and not to the payment of interest, or if such
excessive interest otherwise would exceed the unpaid balance of principal of
this Note such excess shall be applied first to other indebtedness of Borrower
to Lender, and the balance, if any, shall be refunded to Borrower. In
determining whether the interest paid or agreed to be paid hereunder exceeds the
highest amount permitted by applicable law, all sums paid or agreed to be paid
to Lender for the use, forbearance or detention of the indebtedness of Borrower
to Lender shall, to the extent permitted by applicable law, (i) be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the actual rate of interest on account of such
indebtedness is uniform throughout such term, (ii) be characterized as a fee,
expense or other charge other than interest, and (iii) exclude any voluntary
prepayments and the effects thereof. The terms and provisions of this paragraph
shall control and supersede every other provision of all agreements between
Lender and Borrower in conflict herewith.
9. Governing Law and Venue. This Note and the rights and obligations of
the parties hereunder shall be governed by the laws of the United States of
America and by the laws of the State of Texas, and is performable in Dallas,
Dallas County, Texas. Chapter 346 of the Texas Finance Code does not apply to
this Note.
10. Business Day. If any action is required or permitted to be taken
hereunder on a Sunday, legal holiday or other day on which banking institutions
in the State of Texas are authorized or required to close (a "Non-Business
Day"), such action shall be taken on the next succeeding day which is not a
Non-Business Day, and, to the extent applicable, interest on the unpaid
principal balance shall continue to accrue at the applicable rate.
11. Pledge Agreement. This Note is the Note referred to in the Pledge
Agreement dated October 22, 1998, and is entitled to the benefits thereof and
the security as provided for therein. Reference is made to the Pledge Agreement
for a statement of the rights and obligations of Xxxxxxxx, a description of the
nature and extent of the security and the rights of the parties in respect to
such security, and a statement of the terms and conditions under which the due
date of this Note may be accelerated.
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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