EXHIBIT 10.4
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAWS THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE
SATISFACTION OF THE COMPANY WHOSE AUTHORIZED OFFICER HAS SIGNED THIS NOTE BELOW.
FIELDWORKS, INCORPORATED
11% Subordinated Note Due September 30, 2001 (the "Note")
June 29, 2000 $2,500,000.00
For value received, FIELDWORKS, INCORPORATED, a Minnesota corporation
(the "Company"), hereby promises to pay to the order of FWRKS Acquisition Corp.,
a Delaware corporation (together with its successors, representatives, and
permitted assigns, the "Holder"), at the Holder's address specified in the
Purchase Agreement referred to below or such other place as the Holder may
designate in writing from time to time, the principal sum of Two Million Five
Hundred Thousand ($2,500,000), in lawful money of the United States, together
with simple interest from the date hereof on the unpaid principal balance
outstanding from time to time at the rate of eleven percent (11%) per annum
(calculated on the basis of the actual number of days elapsed and a 360 day
year).
1. Purchase and Option Agreement.
This Note has been issued pursuant to and is subject to the terms and
provisions of a Purchase and Option Agreement (the "Purchase Agreement"), dated
as of June 29, 2000, between the Company and the Holder. The Holder is entitled
to all the benefits provided for in the Agreement. The provisions of the
Agreement are incorporated herein by reference with the same force and effect as
if fully set forth herein. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Purchase Agreement.
2. Repayment.
Accrued interest shall be paid monthly, commencing July 15, 2000, and
on the 15th day of each month thereafter. All principal and accrued interest is
due and payable on September 30, 2001 (the "Maturity Date"). The Note may be
prepaid in whole or in part at any time and from time to time without premium or
penalty, at the option of the Company.
3. Payment on Non-Business Days.
Whenever any payment to be made shall be due on a Saturday, Sunday or a
public holiday under the laws of the State of Minnesota, such payment shall be
due on the next succeeding business day and such next succeeding day shall be
included in the calculation of the amount of accrued interest payable on such
date.
4. Transfer.
This Note may be transferred or sold, in whole or in part, subject to
the provisions of Section 15 hereof, or pledged, hypothecated or otherwise
granted as security by the Holder. The Company agrees to issue to the Holder or
any transferee of the Holder from time to time a replacement Note or Notes in
the form hereof and in such denominations as such person may request to
facilitate such transfers and assignments.
5. Replacement.
Upon receipt of a duly executed, notarized and unsecured written
statement from the Holder with respect to the loss, theft or destruction of this
Note (or any replacement hereof), and without requiring an indemnity bond or
other security, or, in the case of a mutilation of this Note, upon surrender and
cancellation of such Note, the Company shall issue a new Note, of like tenor and
amount, in lieu of such lost, stolen, destroyed or mutilated Note.
6. Subordination to Senior Debt.
The Company, for itself, its successors and assigns, covenants and
agrees, and the Holder of this Note covenants and agrees, that the indebtedness
evidenced by this Note shall be subordinate and subject in right of payment to
the prior payment of all Bank Debt (as defined in the Purchase Agreement) of the
Company.
7. Events of Default.
The occurrence of any of the following events shall be an "Event of
Default" under this Note:
(a) the Company shall fail to make any payment of principal on
the date such payment is due hereunder; or
(b) the Company shall fail to make any payment of interest for
a period of seven days after the date such interest is due; or
(c) the Company shall default in the payment of principal of
or interest on any debt of the Company or the performance of any
covenant, agreement, term or condition contained in any agreement or
instrument under which any debt of the Company was created; or
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(d) default shall be made in the performance or observance of
any covenant, agreement, term or condition contained in this Note
(other than those contained in clause (b) of this Section 7), or the
Purchase Agreement (other than those contained in clause (e) of this
Section 7), the Warrant or the Registration Rights Agreement and such
default shall continue unremedied for a period of 30 days after notice
thereof from the Holder; or
(e) default shall be made in the performance or observance of
the Company's covenant to repay this Note and any Working Capital Loans
(as defined in the Purchase Agreement) in accordance with the terms of
Section 8.3 of the Purchase Agreement.
(f) any representation or warranty made by the Company herein
or in the Purchase Agreement or the Registration Rights Agreement shall
prove to have been false or incorrect or breached in any material
respect on the date as of which made; or
(g) the Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property or assets, (ii) admit in writing its inability to pay its
debts as such debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect), (v) file
a petition seeking to take advantage of any bankruptcy, insolvency,
moratorium, reorganization or other similar law affecting the
enforcement of creditors' rights generally, (vi) acquiesce in writing
to any petition filed against it in an involuntary case under United
States Bankruptcy Code, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;
or
(h) a proceeding or case shall be commenced in respect of the
Company, without its application or consent, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
dissolution, winding up, or composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or
the like of it or of all or any substantial part of its assets or (iii)
similar relief in respect of it under any law providing for the relief
of debtors, and such proceeding or case described in clause (i), (ii)
or (iii) shall continue undismissed, or unstayed and in effect, for a
period of 60 days or any order for relief shall be entered in an
involuntary case under United States Bankruptcy Code (as now or
hereafter in effect) against the Company or action under the laws of
any jurisdiction (foreign or domestic) analogous to any of the
foregoing shall be taken with respect to the Company and shall continue
undismissed, or unstayed and in effect for a period of 60 days.
8. Remedies Upon An Event of Default.
If an Event of Default shall have occurred and shall be continuing, the
Holder of this Note may at any time at its option declare the entire unpaid
principal balance of this Note, together with all interest accrued hereon, due
and payable, and thereupon, the same shall be accelerated and so due and
payable, without presentment, demand, protest, or notice, all of which are
hereby
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expressly unconditionally and irrevocably waived by the Company; provided,
however, that upon the occurrence of an Event of Default described in Section
7(f) or 7(g), the outstanding principal balance and accrued interest hereunder
shall be automatically due and payable. No course of delay on the part of the
Holder shall operate as a waiver thereof or otherwise prejudice the right of the
Holder. Upon the occurrence of an Event of Default, the interest rate shall
automatically increase by 4% per annum, but in no event shall such interest rate
exceed the maximum rate permitted by law. No remedy conferred hereby shall be
exclusive of any other remedy referred to herein or now or hereafter available
at law, in equity, by statute or otherwise.
9. Note Due On Sale of Company.
Upon the sale of substantially all of the assets of the Company, the
merger of the Company into another entity where the Company is not the surviving
entity, or the sale of fifty percent (50%) or more of the Company's outstanding
capital stock, or any similar transaction involving the Company, this Note shall
become immediately due and payable.
10. Fees and Expenses.
The Company shall reimburse the Holder for its reasonable fees and
disbursements and the reasonable legal fees and expenses charged by its legal
counsel in connection with modifications, waivers, consents, amendments, or
enforcement, relating to the Note.
11. Governing Law.
This Note shall be governed by and construed in accordance with the
laws with the State of Delaware, without giving effects to the conflicts of laws
provisions thereof.
12. Headings.
Article and section headings in this Note are included herein for
purposes of convenience of reference only and shall not constitute a part of
this Note for any other purpose.
13. Binding Effect.
The obligations of the Company and the Holder set forth herein shall be
binding upon the successors and assigns of each such party, whether or not such
successors or assigns are permitted by the terms hereof.
14. Amendments.
This Note may not be modified or amended in any manner except in
writing executed by the Company and the Holder.
15. Compliance with Securities Laws.
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The Holder understands that this Note has not been registered under the
Securities Act or the laws of any state and may not be sold or transferred, or
otherwise disposed of, without registration under the Securities Act and
applicable state securities laws, or pursuant to an exemption therefrom. In the
absence of an effective registration statement covering this Note, the Holder
will sell or transfer, or otherwise dispose of, this Note only in a manner
consistent with any applicable Federal and state securities laws. This Note and
any Note issued in substitution or replacement therefor shall be stamped or
imprinted with a legend in substantially the following form:
THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS.
16. Jurisdiction.
The Company and the Holder hereby submit to the exclusive jurisdiction
of any Federal or State court sitting in the State of Delaware for any action
brought in connection with this Note. By executing and delivering this Note, the
Company and the Holder hereby irrevocably accept and submit to the personal
jurisdiction of the Federal and State courts sitting in the State of Delaware,
generally and unconditionally, in connection with any action brought in
connection with this Note, and agree that New Castle County is the most
convenient forum for any such action.
17. Parties in Interest.
This Note shall be binding upon, inure to the benefit of and be
enforceable by the Company, the Holder and their respective successors and
permitted assigns.
18. Company Waivers.
Except as otherwise specifically provided herein, the Company and all
others that may become liable for all or any part of the obligations evidenced
by this Note, hereby waive presentment, demand, notice of nonpayment, protest
and all other demands' and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and do hereby consent to any number of
renewals of extensions of the time or payment hereof and agree that any such
renewals or extensions may be made without notice to any such persons and
without affecting their liability herein and do further consent to the release
of any person liable hereon, all without affecting the liability of the other
persons,
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firms or Company liable for the payment of this Note, and do hereby waive trial
by jury.
No delay or omission on the part of the Holder in exercising its rights
under this Note, or course of conduct relating hereto, shall operate as a waiver
of such rights or any other right of the Holder, nor shall any waiver by the
Holder of any such right or rights on any one occasion be deemed a waiver of the
same right or rights on any future occasion.
The Company acknowledges that the transaction of which this Note is a
part is a commercial transaction, and to the extent allowed by applicable law,
hereby waives its right to notice and hearing with respect to any prejudgment
remedy which the Holder or its successors or assigns may desire to use.
FIELDWORKS, INCORPORATED
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: President and Chief
Executive Officer
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