Exhibit 10(t)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS AND ACCORDINGLY MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR LAWS
OR PURSUANT TO AN EXEMPTION THEREFROM. THE PRINCIPAL
AMOUNT OF THIS NOTE, AND INTEREST IN RESPECT THEREOF, IS
SUBORDINATED TO THE PAYMENT IN FULL OF ALL SENIOR
INDEBTEDNESS AND IS SUBJECT TO SET-OFF, AS DESCRIBED IN
THIS NOTE.
ONLINE ENVIRONS HOLDINGS, INC.
NON-NEGOTIABLE SUBORDINATED NOTE
DUE MARCH 31, 2005
$391,500 Deerfield, Illinois
(subject to adjustment and/or March 13, 2000
supplement as provided herein)
FOR VALUE RECEIVED, the undersigned, ONLINE ENVIRONS HOLDINGS
INC., a Delaware corporation (together with its successors, the
"Corporation"), hereby promises to pay to Xxxxxx X. Xx, (together with his
successors and permitted assigns, the "Holder"), the aggregate principal
amount of Three Hundred Ninety-One Thousand Five Hundred Dollars
($391,500), such principal amount subject to adjustment and/or supplement
(on a pro rata basis with the holders of the Other Notes, as defined in
Section 7.9) pursuant to Section 2.2(b)(i) and Section 2.3(a) of that
certain Agreement and Plan of Merger by and between the Corporation, Online
Environs, Inc., a Delaware corporation ("Online"), Holder and others dated
of even date herewith, on the installment date stated in Section 1.2
hereof. Certain capitalized terms used in this Note are defined in
Article VI.
ARTICLE I
PAYMENT
1.1 Interest. Subject to Article III, the outstanding principal
amount of this Note shall bear interest (computed on the basis of a 365 or
366 day year, as the case may be) at a rate equal to eight percent (8%) per
annum from (but excluding) the date hereof to (and including) the Maturity
Date. Subject to Article III, such interest shall be payable (i) annually
in arrears, with respect to each fiscal year of the Corporation (or portion
thereof) on the 120th day following the end of such Corporation's fiscal
year (or portion thereof) ("Interest Payment Dates"), commencing with the
period ending December 31, 2000, and (ii) on the Maturity Date.
1.2 Principal. Subject to Article III, the Corporation shall pay
the principal on this Note equal to $391,500 (or such lesser principal
amount then outstanding) on the Maturity Date.
1.3 Business Days. Whenever payment of principal of, or interest
on, this Note shall be due on a date that is not a Business Day, the date
for payment thereof shall be the next succeeding Business Day and interest
due on the unpaid principal and any other Amounts Payable hereunder shall
accrue during such extension and shall be payable on such succeeding
Business Day.
1.4 Series of Notes. This Note is one of a series of twenty-five
(25) notes issued pursuant to Section 2.2(b) of the Merger Agreement. The
total principal amount of all notes issued in this series is $1,500,000.
All payments of interest or principal on this Note shall be made pro rata
with such payments made on all other notes in such series. The provisions
of Article III herein shall be applied to the entire series of notes
outstanding so that the holder of each note shall be entitled only to a pro
rata share of any payments available to the entire series of notes.
ARTICLE II
PREPAYMENTS; SET-OFF
2.1 Optional Prepayment. The Corporation shall have the right to
prepay the principal amount of this Note in whole or in part at any time,
or from time to time, without payment of any premium or penalty whatsoever,
together with interest thereon accrued to the date of prepayment, and any
such prepayment shall be applied to reduce the Corporation's principal
payment obligations under Section 1.2 in the order of maturity of such
payment obligations; provided, however, that so long as any Senior
Indebtedness remains outstanding and unpaid, any commitment to provide
Senior Indebtedness is outstanding, or any other amount is owing to the
holders of Senior Indebtedness, this Note may not be prepaid in whole or in
part, without the written consent of the holders of Senior Indebtedness.
2.2 Set-off. Subject to the provisions of Article XII of the
Merger Agreement and Section 7.8 herein, the Corporation shall be entitled
to set-off and reduce any Amounts Payable hereunder for any obligations or
liabilities of the Holder to the Corporation or any claims by the
Corporation against the Holder. The Holder, by accepting this Note, hereby
acknowledges and agrees to the foregoing provisions and any subsequent
transferee or successor shall by becoming such transferee or successor be
bound by the foregoing.
ARTICLE III
FREE CASH FLOW
3.1 Payment Limitation. Notwithstanding any other provision of
this Note, but subject to the provisions set forth in the last sentence of
this Section 3.1, the Corporation shall only be required to pay interest,
principal or any other Amounts Payable in respect of this Note if and to
the extent the Corporation's Free Cash Flow for the Corporation's fiscal
year immediately preceding the required payment date is sufficient and
available to make such payment. If the Corporation's Free Cash Flow for
such fiscal year is not sufficient to make such payments, then such
payments will not be made nor be required to be made under this Note, and
the Corporation's payment obligation under this Note will be deferred until
the Corporation's Free Cash Flow would permit payment under this Article
III, and such deferral of payment will not be an Event of Default under
this Note, provided that the Maturity Date will not be deferred under this
Article III for more than two years, at which time, all principal of,
interest on and other Amounts Payable in respect of this Note will be due
and payable.
3.2 Interest Limitation. If, as a result of Section 3.1, the
Corporation does not pay interest on an Interest Payment Date, then such
interest will be deferred (and will bear interest) and will be paid at the
Maturity Date; provided, that the amount of such deferred interest in the
aggregate will not exceed an amount equal to the interest that would accrue
on the initial principal amount of this Note for two years ("Maximum
Interest"). Any deferred interest that exceeds the Maximum Interest will
not accrue or be payable under this Note and will be automatically
eliminated.
3.3 Principal and Amounts Payable Deferral. If, as a result of
Section 3.1, the Corporation does not pay principal or any other Amounts
Payable (other than interest) on any required payment date, then such
principal and Amounts Payable will be deferred (and not bear interest) and
be paid at the Maturity Date.
3.4 Allocation. If the Corporation's Free Cash Flow for any
fiscal year is available to pay some, but not all, of the required
payments, then such available Free Cash Flow will be allocated first to
required principal payments, second to required interest payments, and then
to required payments of any other Amounts Payable.
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ARTICLE IV
DEFAULTS
4.1 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Corporation shall fail to pay within ten Business
Days of the due date thereof any principal of this Note or shall fail
to pay within ten Business Days of the due date thereof any interest
or any other Amounts Payable hereunder and the same shall not have
been cured within thirty (30) days after written notice thereof has
been given by the Holder to the Corporation;
(b) the Corporation shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors; or
(c) an involuntary case or other proceeding shall be
commenced against the Corporation seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or
other similar official, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an
order for relief shall be entered against the Corporation under the
Federal bankruptcy laws as now or hereafter in effect;
then, and in every such event, subject to the provisions of Article V, the
Holder may, by notice to the Corporation and to the holders of Senior
Indebtedness, declare the principal amount of this Note together with
accrued interest thereon, to be, and such portions of the principal amount
of this Note (and accrued interest thereon) shall thereupon become, due and
payable on the tenth Business Day following delivery of such notice to the
Corporation and to the holders of Senior Indebtedness without presentment,
demand, protest or further notice of any kind, all of which are hereby
waived by the Corporation, provided, however, that the Events of Defaults
specified in paragraph (a) will be subject to Article III.
ARTICLE V
SUBORDINATION
5.1 Loans Subordinated to Senior Indebtedness. Notwithstanding
any provision of this Note to the contrary, the Corporation covenants and
agrees, and the Holder by acceptance of this Note likewise covenants and
agrees, that all Amounts Payable shall be subordinated to the extent set
forth in this Article V to the prior payment in full, in cash or cash
equivalents satisfactory to the holders of Senior Indebtedness, of all
Senior Indebtedness. This Article V shall constitute a continuing offer to
and covenant with all persons who become holders of, or continue to hold,
Senior Indebtedness (irrespective of whether such Senior Indebtedness was
created or acquired before or after the issuance of this Note). The
provisions of this Article V are made for the benefit of all present and
future holders of Senior Indebtedness (and their successors and assigns),
and shall be enforceable by them directly against the Holder.
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5.2 Priority and Payment Over of Proceeds in Certain Events.
(a) Upon any payment or distribution of assets of the
Corporation, whether in cash, property, securities or otherwise, in
the event of any dissolution, winding up or total or partial
liquidation, reorganization, arrangement, adjustment, protection,
relief or composition, or assignment for the benefit of creditors of
the Corporation, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership, reorganization, relief or other proceedings
or upon an assignment for the benefit of creditors or any other
marshalling of all or part of the assets and liabilities of the
Corporation (the foregoing events herein collectively referred to as
an "Insolvency Event"), all Senior Indebtedness shall first be paid
in full, in cash, or payment provided for in cash equivalents in a
manner satisfactory to the holders of Senior Indebtedness, before the
Holder shall be entitled to receive any payment or distribution of
assets of the Corporation relating to any Amounts Payable. Upon any
Insolvency Event, any payment or distribution of assets of the
Corporation, whether in cash, property, securities or otherwise, to
which the Holder would be entitled relating to any Amounts Payable
other than pursuant to the provisions of this Article V, shall be
made by the Corporation or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution, directly to the holders of the Senior Indebtedness or
their representatives for application to the payment or prepayment of
all such Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
(b) If (x) there has occurred and is continuing a default in
the payment of all or any portion of any Senior Indebtedness, unless
and until such default shall have been cured or waived, the
Corporation shall not make any payment on or with respect to any
Amounts Payable or acquire this Note (or any portion thereof) for
cash, property, securities or otherwise; or (y) an event (not
involving the non-payment of any Senior Indebtedness) shall have
occurred or, with the giving of notice, or passage of time, or both,
would occur, that would allow holders of any Senior Indebtedness to
accelerate or otherwise demand the payment thereof, and any holders
of the Senior Indebtedness give notice of such event to the
Corporation (the date that such notice is received by the Corporation
is the "Notice Date"), the Corporation shall not make any payment on
or with respect to any Amounts Payable or acquire this Note (or any
portion hereof) for cash, property, securities or otherwise during
the period (the "Blockage Period") commencing on the Notice Date and
ending on the earlier of (1) one year after the Notice Date if at the
end of such one year period such event is not the subject of judicial
proceedings and such Senior Indebtedness shall not have been
accelerated, (2) the date such event is cured or waived to the
satisfaction of the holders of the Senior Indebtedness, or (3) the
date the holders of such Senior Indebtedness shall have given notice
to the Corporation of the voluntary termination of the Blockage
Period. By virtue of accepting this Note and the benefits hereof,
during any time period during which payment of any part of Amounts
Payable due under this Note is prohibited by any of the terms of this
Note, the Holder shall not be entitled, and will not take any action,
including any judicial process, to accelerate, demand payment or
enforce any Indebtedness in respect of this Note or any other claim
with regard to any Amounts Payable.
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(c) If, notwithstanding the foregoing provisions prohibiting
payments or distributions, the Holder shall have received any payment
of, or on account of, any Amounts Payable that was deferred pursuant
to Article III or prohibited by this Article V, before all Senior
Indebtedness shall have been paid in full, in cash or cash
equivalents satisfactory to the holders of the Senior Indebtedness,
then and in such event such payments or distributions shall be
received and held in trust for the holders of the Senior Indebtedness
and promptly paid over or delivered to the holders of the Senior
Indebtedness remaining unpaid thereof to the extent necessary to pay
in full, in cash or cash equivalents satisfactory to the holders of
the Senior Indebtedness, such Senior Indebtedness in accordance with
its terms after giving effect to any concurrent payment or
distribution to the holder of such Senior Indebtedness; provided,
that any such payment which is, for any reason, not so paid over or
delivered shall be held in trust by the Holder for the holders of
Senior Indebtedness.
(d) So long as any Senior Indebtedness remains outstanding,
or the commitment to make credit extensions of said Senior
Indebtedness shall not have been terminated, the Holder will not be
entitled to take, demand, or receive, directly or indirectly, by
setoff, redemption, purchase or in any manner, any voluntary
prepayment or other payment of any Amounts Payable in amounts or in a
manner which are deferred pursuant to Article III or are in violation
of the provisions of this Article V.
(e) Upon any payment or distribution of assets referred to
in Section 5.2(a), the Holder shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings
are pending, and upon a certificate of the receiver, trustee in
bankruptcy, or liquidating trustee delivered to the Holder for the
purpose of ascertaining the persons entitled to participate in such
distribution of assets, the holders of Senior Indebtedness and other
Indebtedness of the Corporation, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article V.
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5.3 Rights of Holders of Senior Indebtedness Not To Be Impaired, etc.
(a) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination and other terms and
conditions provided herein shall at any time in any way be prejudiced
or impaired by any act or failure to act by any such holder, or by
any noncompliance by the Corporation, with the terms and provisions
and covenants herein regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
(b) Article III and this Article V may not be amended
without the written consent of each holder of the Senior Indebtedness
and of the Holder, and any purported amendment without such consent
shall be void. No holder of Senior Indebtedness shall be prejudiced
in such holder's right to enforce the subordination and other terms
and conditions of this Note by any act or failure to act by the
Corporation or anyone in custody of its assets or property.
5.4 Subrogation. Subject to and upon the payment in full, in
cash or cash equivalents satisfactory to the holders of the Senior
Indebtedness, of all Senior Indebtedness, the Holder shall be subrogated,
to the extent of payments or distributions made to the holders of Senior
Indebtedness pursuant to or by reason of this Article V, to the rights of
the holders of such Senior Indebtedness to receive payments or
distributions of assets of the Corporation made on such Senior Indebtedness
until all amounts due under this Note shall be paid in full; and for the
purposes of such subrogation, no payments or distributions to holders of
such Senior Indebtedness of any cash, property or securities to which the
Holder would be entitled except for the provisions of this Article V, and
no payment over pursuant to the provisions of this Article V to holders of
such Senior Indebtedness by the Holder, shall, as among the Corporation,
its creditors (other than holders of such Senior Indebtedness) and the
Holder be deemed to be a payment by the Corporation to or on account of
such Senior Indebtedness, it being understood that the provisions of this
Article V are solely for the purpose of defining the relative rights of the
holders of such Senior Indebtedness, on the one hand, and the Holder, on
the other hand.
5.5 Obligations of the Corporation Unconditional. Nothing
contained in this Note is intended to or shall impair, as between the
Corporation and the Holder, the obligation of the Corporation, which is
absolute and unconditional, to pay to the Holder all Amounts Payable, as
and when the same shall become due and payable in accordance with their
terms, or to affect the relative rights of the Holder and other creditors
of the Corporation (other than the holders of Senior Indebtedness), except
as provided in Section 5.2(b).
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5.6 Section 5 Not To Prevent Events of Default. The failure to
make a payment of any Amounts Payable by reason of any provision of this
Article V shall not be construed as preventing the occurrence of an Event
of Default under Section 5.1 hereof, except as provided in Section 5.2(b).
5.7 Additional Rights of Holders of Senior Indebtedness. If the
Senior Indebtedness has not been paid in full, in cash or cash equivalents
satisfactory to the holders of Senior Indebtedness, at a time in which the
Corporation is subject to an Insolvency Event, (a) the holders of the
Senior Indebtedness are hereby irrevocably authorized, but shall have no
obligation, to demand, sue for, collect and receive every payment or
distribution received in respect of any such Insolvency Proceeding and give
acquittance therefor and to file claims and proofs of claim, as their
interests may appear, and (b) the Holder shall duly and promptly take, for
the account of the holders of the Senior Indebtedness, as their interests
may appear, such actions as the holders of the Senior Indebtedness may
reasonably request to collect and receive all Amounts Payable by the
Corporation in respect of this Note and to file appropriate claims or
proofs of claim in respect of this Note. Upon request by the Corporation,
the Holder of this Note shall deliver to the holders of Senior Indebtedness
or parties contemplating becoming holders of Senior Indebtedness a written
statement confirming that (i) the provisions (including the subordination
provisions) of this Note are in full force and effect; and (ii) that such
party is or will be entitled to rely upon and enjoy the benefits of the
provisions (including the subordination provisions) of this Note as a
holder of Senior Indebtedness.
5.8 Senior Indebtedness Changes. By virtue of accepting this
Note and the benefits hereof, the Holder hereby waives any and all notice
of renewal, extension or accrual of any of the Senior Indebtedness, present
or future, and agrees and consents that without notice to or consent of the
Holder: (a) the obligations and liabilities of the Corporation or any other
party or parties under the Senior Indebtedness may, from time to time, in
whole or in part, be renewed, refinanced, replaced, extended, refunded,
modified, amended, accelerated, compromised, supplemented, terminated,
increased, decreased, sold, exchanged, waived or released; (b) the holders
of Senior Indebtedness and their representatives may exercise or refrain
from exercising any right, remedy or power granted by any document
creating, evidencing or otherwise related to the Senior Indebtedness or at
law, in equity, or otherwise, with respect to the Senior Indebtedness or in
connection with any collateral security or lien (legal or equitable) held,
given or intended to be given therefor (including, without limitation, the
right to perfect any lien or security interest created in connection
therewith); (c) any and all collateral security and/or liens (legal or
equitable) at any time, present or future, held, given or intended to be
given for the Senior Indebtedness, and any rights or remedies of the
holders of Senior Indebtedness and their representatives in respect
7
thereof, may, from time to time, in whole or in part, be exchanged, sold,
surrendered, released, modified, perfected, unperfected, waived or extended
by the Holders and their representatives; (d) any balance or balances of
funds with any holder of Senior Indebtedness at any time standing to the
credit of the Corporation or any guarantor of any of the Senior
Indebtedness may, from time to time, in whole or in part, be surrendered or
released, all as the holders of Senior Indebtedness, their representatives
or any of them may deem advisable and all without impairing, abridging,
diminishing, releasing or affecting the subordination to the Senior
Indebtedness provided for herein; and (e) the Corporation may incur any
amount or type of Senior Indebtedness (including Senior Indebtedness owed
to Affiliates), or modify, restate, refinance, replace or amend any Senior
Indebtedness from time to time, on terms and conditions acceptable to the
Corporation, without notice to or approval by the Holder.
5.9 Waivers. In the event the holders of Senior Indebtedness
elect to exercise their remedies to liquidate any collateral given to
secure the Senior Indebtedness, the Holder hereby waives any right it may
have to contest the validity of or the value obtained as a result of the
exercise of remedies by the holders of Senior Indebtedness, including, but
not limited to, a foreclosure, a sale pursuant to the Uniform Commercial
Code or the acceptance by the holders of Senior Indebtedness in lieu of
foreclosure. The Holder further waives any right it may have either in or
out of any bankruptcy or similar proceeding to challenge any action taken
by the holders of Senior Indebtedness as either a preference or fraudulent
conveyance and further agrees not to take any active role in such a
proceeding other than the filing of claim in any such proceeding, which
claim shall be subordinate (to the extent set forth above) to the claims of
the holders of Senior Indebtedness.
ARTICLE VI
DEFINITIONS
For purposes of this Note, the following terms have the meanings
set forth below.
"Affiliate" means Jordan Industries, Inc. and its respective
direct and indirect Subsidiaries, and any other person that directly, or
indirectly through one or more intermediaries, controls or is controlled by
or is under common control with them.
"Amounts Payable" means all principal of, interest on, premium, if
any, fees, costs, expenses, indemnities or any other amounts due from the
Corporation under this Note, and all claims against or liabilities of the
Corporation in respect of this Note.
"Business Day" means any day except a Saturday, Sunday or other
days on which commercial banks in New York City are required or authorized
by law to close.
"Capital Expenditures" means the capital expenditures of the
Corporation, determined in accordance with generally accepted accounting
principles, consistently applied.
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"Closing Date" means the date on which the transactions
contemplated by the Merger Agreement are consummated.
"Default" means any condition or event that constitutes an Event
of Default or that with notice or lapse of time or both would, unless cured
or waived, become an Event of Default.
"Free Cash Flow" means, for any period, (i) the consolidated net
income (or net deficit) of the Corporation and its subsidiaries (excluding,
however, (A) all extraordinary and other non-recurring items of income, but
not loss, and (B) all interest income as reflected in the Corporation's
financial statements); plus (ii) interest (including deferred financing
fees and expense) and other expense in respect of the Corporation's
Indebtedness (including intercompany Indebtedness or Indebtedness owed to
Affiliates) charged, accrued or otherwise allocated against such net
income; plus (iii) expenses for amortization charged, accrued or otherwise
allocated against such net income; plus (iv) expenses for depreciation
(including increased depreciation and increased inventory values resulting
from purchase accounting in connection with acquisitions and business
combinations) charged, accrued or otherwise allocated against such net
income; plus (v) any reductions in Working Capital from the beginning to
the end of such period; minus (vi) payments of interest and principal on
Indebtedness (other than required interest and principal payments on this
Note) paid or accrued during such period or otherwise payable on the
applicable payment date; provided, however, that the aggregate amount of
the principal payments on the Senior Indebtedness included in this
calculation of Free Cash Flow shall not exceed the amount set forth in
Exhibit A attached hereto for the period in question whether or not paid
during such period; minus (vii) any increases in Working Capital from the
beginning to the end of such period; minus (viii) Capital Expenditures
during such period. Free Cash Flow will reflect selling, general and
administrative expense, management, consulting and service fees, general
and overhead, allocated to the Corporation by its Affiliates. Free Cash
Flow will be determined by the Corporation's Board of Directors by
reference to the Corporation's financial statements, prepared in accordance
with generally accepted accounting principles, consistently applied, whose
determination will be final, binding, conclusive and non-appealable.
"Indebtedness" means the principal, interest (including any
interest accruing subsequent to an event specified in Section 4.1(b) or
4.1(c) at the rate specified in the applicable contract, whether or not a
claim for such interest is allowed in any such proceeding or case);
premium, if any, fees (including, without limitation, any commitment,
agency, facility, structuring, restructuring or other fee), costs,
expenses, indemnities and other amounts due on or in connection with any
indebtedness (including, without limitation, Senior Indebtedness), whether
or not contingent, in respect of borrowed money or evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing the deferred
and unpaid balance of the purchase price of any property (including
pursuant to capital leases), and any financial hedging obligations, if and
to the extent such indebtedness (other than a financial hedging obligation)
would appear as a liability upon a balance sheet of any person or entity
prepared on a consolidated basis in accordance with generally accepted
accounting principles, other than a trade payable or accrued expense, and
also includes, to the extent not otherwise included, the guarantee by any
person or entity of items that would be included within this definition.
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"Maturity Date" means March 31, 2005 subject to extension to a
later date as provided by the terms of this Note, but in no event shall it
mean a date later than March 31, 2007.
"Merger Agreement" means the Merger Agreement dated as of February
20, 2000 among the Corporation, Online, the Holder and others, as the same
has been or may be amended from time to time.
"Note" means this Non-Negotiable Subordinated Note due March 31,
2005.
"Senior Indebtedness" shall mean any Indebtedness of the
Corporation (including, without limitation, any intercompany Indebtedness),
now or herewith incurred, or any documents executed under or in connection
therewith, and any amendments, modifications, deferrals, renewals or
extensions of such Indebtedness, and any amounts owed in respect of any
Indebtedness incurred in refinancing, replacing or refunding the foregoing
(including any refinancing, replacing or refunding with new lenders),
unless the terms of such Indebtedness expressly provide that such
Indebtedness is not Senior Indebtedness with respect to this Note. Nothing
in this Note shall restrict an Affiliate of the Corporation from being a
holder of Senior Indebtedness. Indebtedness owed to Affiliates will be
Senior Indebtedness for purposes of this Note. Notwithstanding anything
herein to the contrary, Senior Indebtedness shall include any payables,
accrued expenses, fees or other amounts due to an Affiliate of the
Corporation. Notwithstanding anything herein to the contrary, none of the
obligations or liabilities of the Corporation to Holder shall be included
in Senior Indebtedness.
"Subsidiary" of a person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power
to elect a majority of the Board of Directors or other persons performing
similar functions are at the time directly or indirectly owned by such
person.
"Working Capital" means the difference of (a) the sum of
Corporation's net account receivables, inventories (net of reserves), and
prepaid expenses, minus (b) the sum of accounts payable and accrued
expenses, determined in accordance with generally accepted accounting
principles, consistently applied.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be delivered personally,
sent by facsimile transmission or sent by certified, registered or express
mail, postage prepaid, and shall be deemed given when so delivered
personally, or sent by facsimile transmission, or if mailed or sent by
overnight courier, upon receipt thereof, as follows:
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(a) If to the Corporation to:
Xxxxxx X. Xxxxx, President
Xxxx X. Xxxxxxxxx, Vice President
ONLINE ENVIRONS HOLDINGS, INC.
ArborLake Centre, Suite 000
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
X. Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
Xxxxxxxx X. Xxxxxx, Esq.
XXXXXXXXXXXX XXXX & XXXXXXXXX
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 816-531-7545
(b) If to the Holder, to:
Xx. Xxxxxx X. Xx, President
Online Environs, Inc.
000 Xxxxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-1955
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx Xxxxx, Esq.
Xxxxxxxx & Worcester, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Each party may, by notice given in accordance with this Section to the
other party, designate another address or person for receipt of notices
hereunder.
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7.2 No Waivers. No failure or delay by the Holder in exercising any
right, power or privilege hereunder or under this Note shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. No notice to or demand on
the Corporation in any case shall entitle the Corporation to any other or
further notice or demand in related or similar circumstances requiring such
notice.
7.3 Amendments and Waivers. Subject to Section 5.3, any provision
of this Note may be amended or waived if, but only if, such amendment or
waiver is in writing, signed by the Corporation and the Holder.
7.4 Successors and Assigns. The provisions of this Note shall be
binding upon and inure to the benefit of the Holder and its respective
successors and permitted assigns. Without the prior written consent of the
Corporation and the holders of Senior Indebtedness, the Holder of this Note
agrees that it will not (a) sell, assign, pledge or otherwise transfer, in
whole or in part, directly or indirectly, by operation of law or otherwise,
this Note or any interest therein or (b) create, incur or suffer to exist any
security interest, lien, charge or other encumbrance whatsoever upon this
Note. If requested by a holder of Senior Indebtedness as part of any consent,
the assignee or transferee of the Holder shall agree in writing to be bound by
all of the terms of this Note. The holder hereof hereby waives proof of
reliance hereon by the holders of Senior Indebtedness.
7.5 Replacement Note. Upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction or mutilation
of this Note and of a letter of indemnity reasonably satisfactory to the
Corporation from the Holder and upon reimbursement to the Corporation of all
reasonable expenses incident thereto, and upon surrender or cancellation of
this Note, if mutilated, the Corporation will make and deliver a new Note of
like tenor in lieu of such lost, stolen, destroyed or mutilated Note.
7.6 Corporation's Obligations. The Holder agrees and acknowledges
that this Note and the Corporation's obligations hereunder and for all Amounts
Payable are solely obligations and liabilities of the Corporation. None of the
Corporation's directors, officers, employees, stockholders, advisors,
consultants and affiliates or any other persons shall be obligated or liable
in respect of this Note or any Amounts Payable, and Holder hereby releases
them from any such obligation of liability.
7.7 LITIGATION. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED, APPLIED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
AND NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY ANY LAW OTHER THAN
THAT OF ILLINOIS, AND NO DEFENSE, COUNTERCLAIM OR RIGHT OF SET-OFF GIVEN OR
ALLOWED BY THE LAWS OF ANY OTHER STATE OR JURISDICTION, OR ARISING OUT OF THE
ENACTMENT, MODIFICATION OR REPEAL OF ANY LAW, REGULATION, ORDINANCE OR DECREE
12
OF ANY FOREIGN JURISDICTION, BE INTERPOSED IN ANY ACTION HEREON. SUBJECT TO
SECTION 7.8, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS NOTE MAY BE COMMENCED IN THE STATE COURTS, OR IN THE
UNITED STATES DISTRICT COURTS IN CHICAGO, ILLINOIS. THE PARTIES CONSENT TO
SUCH JURISDICTION, AGREE THAT VENUE WILL BE PROPER IN SUCH COURTS AND WAIVE
ANY OBJECTIONS BASED UPON FORUM NON CONVENIENS. THE CHOICE OF FORUM SET
FORTH IN THIS SECTION 7.7 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT
OF ANY ACTION UNDER THIS AGREEMENT IN ANY OTHER JURISDICTION.
7.8 ARBITRATION. THE HOLDER HEREBY WAIVES AND SHALL NOT SEEK JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, CLAIM, COUNTERCLAIM, DEFENSE OR OTHER
LITIGATION OR DISPUTE UNDER OR IN RESPECT OF THIS NOTE. THE HOLDER AGREES THAT
ANY SUCH DISPUTE RELATING TO OR IN RESPECT OF THIS NOTE, ITS NEGOTIATION,
EXECUTION, PERFORMANCE, SUBJECT MATTER, OR ANY COURSE OF CONDUCT OR DEALING OR
ACTIONS UNDER OR IN RESPECT OF THIS NOTE, SHALL BE SUBMITTED TO, AND RESOLVED
EXCLUSIVELY PURSUANT TO ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
SHALL TAKE PLACE IN CHICAGO, ILLINOIS, AND SHALL BE SUBJECT TO THE SUBSTANTIVE
LAW OF THE STATE OF ILLINOIS. DECISIONS PURSUANT TO SUCH ARBITRATION SHALL BE
FINAL, CONCLUSIVE AND BINDING ON THE PARTIES. UPON THE CONCLUSION OF
ARBITRATION, THE PARTIES MAY APPLY TO ANY APPROPRIATE COURT OF THE TYPE
DESCRIBED IN SECTION 7.7 TO ENFORCE THE DECISION PURSUANT TO SUCH ARBITRATION.
7.9 Representative. The Corporation and Holder hereby acknowledge
and agree that Holder shall be designated as the representative of all other
holders (the "Other Holders") of subordinated notes (the "Other Notes") issued
by the Corporation pursuant to Section 2.2(b) of the Merger Agreement solely
for the purpose of receiving notices and communications from the Corporation
pursuant to Section 7.1 of this Note and the Other Notes for and on behalf of
the Other Holders.
[SIGNATURES ARE ON THE FOLLOWING PAGE]
13
ONLINE ENVIRONS HOLDINGS, INC.
By:
----------------------------------
Xxxx X. Xxxxxxxxx, Vice President
The Holder, by his signature below, acknowledges his rights and obligations
pursuant to, and agrees to the provisions set forth in, Section 7.9.
HOLDER
By:
----------------------------------
Xxxxxx X. Xx
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EXHIBIT A
AMORTIZATION SCHEDULE
FISCAL YEAR ENDED PRINCIPAL AMOUNT
----------------- ----------------
December 31, 1999 $0
December 31, 2000 $100,000
December 31, 2001 $500,000
December 31, 2002 $1,000,000
December 31, 2003 $1,250,000
December 31, 2004 $900,000
The Corporation and Holder agree that if the Corporation acquires
any business after the Closing, any Senior Indebtedness attributable to
such acquisition shall be divided by five and an equal one-fifth portion
shall be added to the principal amount for each remaining year on this
amortization schedule.
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