EXHIBIT 2.5.2
PROMISSORY NOTE
$86,405,217
July 2, 1998
LOAN
FOR VALUE RECEIVED, Able Telcom Holding Corp., a Florida corporation ("Able
Telcom"), pursuant to that certain Agreement and Plan of Merger, dated as of
April 26, 1998, as amended by an Amendment thereto, dated as of July 2, 1998 (as
so amended, the "Merger Agreement"), by and among MFS Acquisition Corp.
("MFSAC"), Able Telcom, MFS Network Technologies, Inc. and MFS Communications
Company, Inc. ("MFS"), promises to pay to MFS, or order, without set-off (except
as otherwise specified in the Master Services Agreement delivered pursuant to
the Merger Agreement) , counterclaim or any deduction of any nature by wire
transfer in immediately available funds to First Union National Bank of Florida,
Jacksonville, Florida, AWA #000000000; for the credit of WorldCom, Inc.
Concentration Account, Account Number: 2156320029820, or such other account as
may be specified in writing by MFS, the amounts in respect of principal and
interest on the Payment Dates indicated below. The principal amount of this Note
is $86,405,217.
INTEREST RATE
The "Interest Rate" shall be 12% per annum or, if this Note shall not have been
paid in full on or before July 31, 1998 or if a default shall have occurred
under this Note (whether or not such default is continuing), 18% per annum, in
each such case calculated on the basis of the actual days elapsed over a year of
365 days. Notwithstanding any other limitations con tained in this Note, MFS
does not intend to charge and Able Telcom shall not be required to pay any
interest or other fees or charges in excess of the maximum permitted by
applicable law.
PAYMENT DUE AND PAYMENT DATES
On July 31, 1998, all accrued interest to that date and the lesser of (i)
$20,000,000 of the principal outstanding on that date (without regard for
payments made in respect of the Collections as defined below) or (ii) the
entirety of the remaining principal, shall be due and payable by Able Telcom.
Any remaining principal and interest on the Note shall be due and payable by
Able Telcom on August 31, 1998. Notwithstanding the foregoing, all accrued
interest and principal hereunder shall be payable on the earlier to occur: (i)
the date of signing by Able Telcom of any merger or similar agreement to which
Able Telcom would be a party, or (ii) the date on which a third party first
acquires beneficial ownership of at least a 40% equity interest in Able Telcom
(such earliest date, the "Payment Date"). Able Telcom agrees that it will not
enter into any agreement contemplated by clause (i) or issue equity interests as
contemplated by clause (ii) without contemporaneously repaying this Note in full
in accordance with its terms.
SECURITY
As security for this Note, MFS is entitled to the benefits of a certain Stock
Pledge Agree ment, dated as of July 2, 1998, by and between WorldCom, Inc.
("WorldCom") for itself and certain beneficiaries, including MFS, and Able
Telcom (the "Pledge Agreement"). Able Telcom agrees that, in the event that
WorldCom or MFS exercises its remedies under the Pledge Agreement and pursuant
thereto acquires the Pledged Stock or the substitute collateral thereunder (as
defined in the Pledge Agreement), (i) the "Deemed Value" to MFS of such
acquisition shall be (A) the original principal amount of this Note, (B) less
$10,000,000, (C) less the amount of any indebtedness incurred, or dividends
paid, by MFSAC in violation of Section 3 hereof, plus (D) the aggregate amount
of any prepayments of principal of this Note on or prior to the date of such
acquisition, including in respect of Collections (as defined below), provided
that the "Deemed Value" shall not exceed the unpaid principal amount and accrued
and unpaid interest on this Note at the time of such acquisition, (ii) the
principal amount of this Note shall be reduced by the Deemed Value and this Note
shall continue to be in default as to any remaining unpaid amount and accrued
interest, and (iii) Able Telcom shall remain obligated to repay the remaining
unpaid amount of this Note and accrued interest in full in accordance with its
terms.
SUBORDINATION
Able Telcom and MFS agree that, without prejudice to MFS' rights under the
preceding paragraph, MFS' right to receive payments on this Note shall be a
senior obligation of Able Telcom, except that MFS agrees that its right to
receive the "Subordinated Amount" in
2
respect of this Note shall be a subordinated and junior in right of payment to
all obligations of Able Telcom pursuant to (a) those certain $10 million 12%
Senior Subordinated Notes, due January 6, 2005, issued by Xxxx Xxxxxx and now
held by Xxxx Xxxxxxx Mutual Life Insurance Company, Xxxx Xxxxxxx Variable Life
Insurance Company and Signature 1A (Cayman), Ltd. ("Senior Subordinated Notes")
and the Note Agreement, dated as of January 6, 1998, among Able Telcom and the
aforementioned holders of the Senior Subordinated Notes, as amended and after
giving effect to all consents given through and including the date hereof (the
"Senior Subordinated Note Agreement"; all obligations, indebtedness and
liabilities of Able Telcom now or hereafter existing, whether for principal,
interest, Prepay ment Compensation Amount, fees, expenses (including, without
limitation, attorneys' fees), indemnification or otherwise in respect of the
Senior Subordinated Notes and the Senior Subordinated Note Agreement being
herein referred to as the "Senior Subordinated Note Obligations") and (b) the
Notes issued, and other obligations arising, under that certain Credit Agreement
dated June 11, 1998, between Able Telcom and NationsBank, N.A. as Administrative
Agent and CIBC Inc. as Documentation Agent and the Lenders from time to time
parties thereto (as the same may be amended from time to time but without
increasing the "Commitments" thereunder, the "Revolving Credit Notes" and the
"Credit Agreement", respectively; the obligations of Able Telcom arising under
or in connection with the Revolving Credit Notes and the Credit Agreement being
herein referred to as the "Credit Agreement Obligations"). All Senior
Subordinated Note Obligations and all Credit Agreement Obligations shall first
be fully and indefeasibly paid in cash and in full and all commitments to lend
under the Credit Agreement shall have been permanently extinguished at least 91
days before any payment, whether in cash, securities or other property, may be
made, accepted or received on account of the Subordinated Amount. Any payment
paid to or collected, accepted, or received by any holder of this Note in
contravention of any of the terms of this paragraph shall be segregated, held in
trust and promptly delivered to the owners and holders of the Senior
Subordinated Note Obligations and Credit Agreement Obligations to the extent
necessary to pay such Senior Subordinated Note Obligations and Obligations in
full in accordance with their respective terms.
Notwithstanding anything to the contrary contained in this Note or any agreement
delivered in connection herewith, but subject in all respects to the preceding
paragraph, for so long as any amount is outstanding under the Senior
Subordinated Note Obligations or the Credit Agreement Obligations, and for so
long as there is any commitment to lend existing under the Credit Agreement, no
holder of this Note may exercise any remedies in respect thereto or otherwise
than with respect to recourse against the Pledged Stock or the substituted
collat eral during any period (a "Standstill Period") commencing on the first
date the holder of the Subordinated Amount, but for the provisions of this
section, would have been entitled to enforce its claim and ending upon the
earlier of: (a) the date which is 120 days after the
3
commencement of the Standstill Period, if an event of default in payment of the
Senior Subordinated Note Obligations or the Credit Agreement Obligations has
occurred and is continuing, and 150 days after the commencement of such
Standstill Period if no such event of default has occurred during that 120 day
period; and (b) the date that any owner or holder of the Senior Subordinated
Notes or the Credit Agreement Obligations commences the exercise of any remedies
in respect of such Senior Subordinated Notes or Obligations.
For purposes of this section, the "Subordinated Amount" shall be (x) in the
event that WorldCom or MFS exercises its remedies under the Pledge Agreement and
pursuant thereto acquires the Pledged Stock or the substitute collateral
thereunder, the outstanding principal amount of this Note plus accrued interest
minus the Deemed Value (the "Deficiency Amount") plus any amounts representing
costs, expenses and fees in paragraph 1(iv) of "Additional Terms And Conditions"
below, and any similar costs, expenses and fees under the Pledge Agreement, and
(y) until such time if ever as WorldCom or MFS exercises its remedies under the
Pledge Agreement and pursuant thereto acquires the Pledged Stock or the
substitute collateral thereunder, the unpaid principal amount of and accrued
interest on this Note plus any amounts representing costs, expenses and fees in
paragraph 1(iv) of "Additional Terms And Conditions" below, and any similar
costs, expenses and fees under the Pledge Agreement, it being agreed and
understood that the Subordinated Amount shall under no circumstances include,
and neither MFS nor WorldCom shall be under any obligation to repay to Able
Telcom or any holder or owner of the Senior Subordinated Notes or the Credit
Agreement Obligations, any purchase price, extension fee or other amounts
heretofore paid to MFS or WorldCom under the Merger Agreement (which amounts
are, in the aggregate, approximately $16,039,940), any amounts that are or may
be set off by MFS or WorldCom or paid to MFS as provided in paragraph 1(ii) of
"Additional Terms and Conditions" below, any "Collections" received under
paragraph 6 of "Additional Terms and Conditions" below and the $20 million
prepayment referred to in clause (i) of the "Payment Due and Payment Dates"
paragraph above. Notwithstanding anything to the contrary contained in this Note
or any agreement delivered in connection herewith, but only in the event that
WorldCom or MFS exercises its remedies under the Pledge Agreement and pursuant
thereto acquires the Pledged Stock or the substitute collateral thereunder, any
unpaid claim under the Note by WorldCom or MFS which does not constitute a
Subordi nated Amount will be satisfied solely from the proceeds of the Pledged
Stock or the substituted collateral.
Able Telcom and, by its acceptance hereof, MFS, acknowledges and agrees that
this Note is not "Senior Debt", as defined in the Senior Subordinated Note
Agreement.
4
Able Telcom and, by its acceptance hereof, MFS, acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement to
and a consideration of each holder or owner of the Senior Subordinated Note
Obligations or Credit Agreement Obligations in consenting to the incurrence and
maintenance of the indebtedness represented by this Note, and such holder or
owner of Senior Subordinated Note Obligations or Credit Agreement Obligations
has conclusively relied on such subordination provisions. Each such holder of
Senior Subordinated Note Obligations or Credit Agreement Obligations is intended
to be, and is, a third party beneficiary of this Subordination provision. MFS
acknowledges and agrees that the provisions set forth in this Subordination
provision shall be enforceable against it by the holders of the Senior
Subordinated Note Obligations or Credit Agreement Obligations. Notwithstanding
anything contained in this Note or any other financing document to the contrary,
none of the provisions of this subordination provision may, directly or
indirectly, be amended, modified, supplemented or waived without the prior
written consent of all holders of the Senior Subordinated Notes and the holders
of a majority of the owners and holders of the Credit Agreement Obligations.
ADDITIONAL TERMS AND CONDITIONS
1. Able Telcom: (i) waives presentment, demand, notice of demand, protest,
notice of protest and notice of nonpayment and any other notice
required to be given under applicable law to Able Telcom, in connection
with the delivery, acceptance, performance, default or enforcement of
this Note, of any indorsement of this Note or of any document or
instrument evidencing any security for payment of this Note; (ii)
waives any and all setoff or similar rights that it may have to
withhold or reduce payments on this Note, including without limitation
arising in connection with any claims made under the Merger Agreement
or any of the other agreements entered into in connection therewith
(except as otherwise specified in the Master Services Agreement
delivered pursuant to the Merger Agreement); (iii) consents to any and
all delays, extensions or other modifications of this Note or waivers
of any term hereof or release or discharge by MFS of Able Telcom or
release, substitution or exchange of any security for the payment
hereof or the failure to act on the part of MFS or any indulgence shown
by MFS, from time to time and in one or more instances (without notice
to or further assent from Able Telcom), and agrees that no such action,
failure to act or failure to exercise any right or remedy, on the part
of MFS shall in any way affect or impair the obligations of Able Telcom
or be con strued as a waiver by MFS of, or otherwise affect, any of
MFS' rights under this Note, under any indorsement of this Note or
under any document or instrument evidencing any security for payment of
this Note; and (iv) agrees to pay, on demand, all costs and expenses
relating to the execution, recording or collection of
5
this Note or of any indorsement and/or the enforcement of MFS' rights
with respect to, or the protection of, or realization upon, any
property securing payment hereof, including reasonable attorney's fees.
2. Able Telcom may, without premium or penalty, at any time and from time
to time, prepay all or a portion of the outstanding principal balance
due under this Note, provided that each such prepayment is accompanied
by accrued interest on the amount of principal prepaid calculated to
the date of such prepayment (except as otherwise permitted by paragraph
6 below).
3. Beginning on the date of this Note and continuing for so long as the
Note shall not have been paid in full in accordance with its terms,
Able Telcom covenants and agrees with MFS that Able Telcom shall not
permit MFSAC (as the surviving corporation in the merger contemplated
by the Merger Agreement) to, (i) create, incur, assume, suffer to exist
or otherwise become or remain directly or indirectly liable with
respect to, any indebtedness, other than indebtedness that is
outstanding on the date of this Note or indebtedness the proceeds of
which are used entirely to repay this Note in accordance with its terms
or indebtedness to Able Telcom incurred for working capital purposes),
(ii) enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution), discon tinue its
business or convey, lease, sell, transfer or otherwise dispose of, in
one transaction or series of transactions, all or any substantial part
of its business or property except with the express prior written
consent of MFS, or (iii) declare or pay any dividends, or return any
capital, to its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire,
directly or indirectly, any shares of any class of its capital stock
now or hereafter outstanding (or any options or warrants issued with
respect to its capital stock), or set aside any funds for any of the
foregoing purposes.
4. This Note is payable on a specific date. Accordingly, the occurrence of
any one or more of the following events shall constitute a default
under this Note: (i) the failure to pay or perform any obligations,
liabilities or indebtedness of Able Telcom to MFS, whether under this
Note or any other agreement, note or instru ment now or hereafter
existing, as and when due (whether at maturity or by acceleration and
no prior demand therefor by MFS being necessary); (ii) a proceed ing
being filed or commenced against Able Telcom for dissolution or
liquidation of Able Telcom (except where such proceeding is filed or
commenced
6
involuntarily and is dismissed or discharged within sixty (60) days of
the date of notice thereof) or Able Telcom voluntarily or involuntarily
terminating or dissolving or being terminated or dissolved; (iii)
insolvency of, business failure of, the appointment of a custodian,
trustee, liquidator or receiver for or for any of the property of, or
an assignment for the benefit of creditors by or the filing of a
petition under bank ruptcy, insolvency, or debtor's relief law (except
where such appointment, assign ment, or filing is involuntary and is
dismissed or discharged within sixty (60) days of the date of notice
thereof), or for any readjustment of indebtedness, composition or
extension by or against Able Telcom; (iv) any attachments, liens or
additional security instruments being placed upon the property which is
security for this Note (except where such attachment or lien is created
by other than Able Telcom or its affiliates and is removed within sixty
(60) days of the date of notice thereof); (v) acquisition at any time
or from time to time of title to the whole of or any part of the
property which is security for this Note by any person, partnership or
corpora tion other than Able Telcom; (vi) any representation or
warranty, whether hereun der or pursuant to the Merger Agreement or the
Pledge Agreement, made by Able Telcom to MFS is, or was, untrue or
materially misleading at the time such representation or warranty was
made; (vii) any default as defined in the Pledge Agreement; or (viii)
breach of any the covenants contained in Section 3 hereof.
5. Whenever there is a default under this Note or any proceeding in
bankruptcy, receivership, or insolvency, including an assignment for
the benefit of creditors instituted by or against Able Telcom (except
where such bankruptcy or insolvency proceeding or assignment is filed
or instituted against Able Telcom and is dis missed or discharged
within sixty (60) days of the date of notice thereof) the entire
balance outstanding hereunder shall automatically become immediately
due and payable, without presentment, notice, protest or demand of any
kind (all of which are expressly waived by Able Telcom) for the payment
of the whole or any part hereof (subject to the subordination
provisions contained in the portion of this Note entitled "Limited
Subordination"). Failure at any time to exercise any of the aforesaid
options or any other rights of MFS hereunder shall not constitute a
waiver thereof, nor shall it be a bar to exercise of any of the
aforesaid options or rights at a later date.
6. Beginning on July 14, 1998 and on every second Tuesday thereafter for
so long as the Note shall not have been paid in full in accordance with
its terms, Able Telcom shall provide to MFS by fax to the attention of
Xxxxxxxxx X. Xxxxxxxxx (i) a
7
schedule of all payments (the "Collections") under the Contracts (as
defined in the Merger Agreement) received through the close of business
on the prior Friday, (ii) all the supporting documentation, if
requested, evidencing the Collections and their respective amounts
certified as correct by the senior financial officer of Able Telcom,
and (iii) a wire transfer in immediately available funds of the amount
equal to 10% percent of the total Collections for that period. Such
payments shall be first applied to the principal in excess of the
Deemed Value outstanding hereun der and then to accrued interest.
Information as to the Collections shall be subject to audit by MFS at
its expense, unless such audit uncovers an underpayment pursuant to
this paragraph of at least ten percent (10%), in which event such audit
shall be at Able Telcom's expense.
7. This Note is delivered in and shall be construed under the laws of the
State of Delaware and the United States of America, without giving
effect to the conflict of laws principles thereof, and in any
litigation in connection with, or enforcement of, this Note or any
indorsement of this Note or any security given for payment hereof, Able
Telcom waives trial by jury and consents to and confers personal
jurisdiction on courts of the State of Delaware or the United States
District Court for the District of Delaware, and expressly waives any
objections as to venue in any of such courts. As used in this Note, the
term MFS shall include successors, indorsees and assigns of MFS.
8. In the event any one or more of the provisions of this Note shall for
any reason be held to be invalid, illegal or unenforceable, in whole or
in part or in any respect, or in the event that any one or more of the
provisions of this Note operate or would prospectively operate to
invalidate this Note, then and in either of those events, such
provision or provisions only shall be deemed null and void and shall
not affect any other provision of this Note and the remaining
provisions of this Note shall remain operative and in full force and
effect and shall in no way be affected, prejudiced or disturbed
thereby.
8
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its
duly authorized officer as of the day and year first above written.
ABLE TELCOM HOLDING CORP.
0000 Xxxxx Xxxxx, Xxxxx 0000,
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
By: /S/ XXXXXX X. XXXXXX
-------------------------------------
Name: XXXXXX X. XXXXXX
Title: CHAIRMAN
9
ACKNOWLEDGEMENT
STATE OF VIRGINIA /section/
COUNTY OF PITTSYLVANIA /section/
Before me, the undersigned, a Notary Public, on this day
personally appeared Xxxxxx Xxxxxx, known to me or proved to me on the oath of
___________________ or through (description of identity card or other document)
to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that the same was the act of the said Able
Telcom Holding Corp., a Florida corporation, and that he has executed the same
as the act of such corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
Given under my hand and seal of office this 3rd day of July,
1998.
/S/ XXXXX XXXXXXXX
----------------------------------
Notary Public, State of Virginia
XXXXX XXXXXXXX
----------------------------------
Printed Name of Notary
(SEAL OR STAMP)
10
