Exhibit 99.i.6
NON-RECOURSE SECURED PROMISSORY NOTE
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("Note")
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Due June 24, 2003
$XXX,XXX June 24, 1998
FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to pay
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to the order of MCG Credit Corporation, a Delaware corporation, or its successor
(the "Lender") the principal sum of ____________ dollars ($XXX,XXX) in lawful
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money of the United States of America on June 24, 2003 (the "Maturity Date"),
and to pay interest at a rate per annum equal to three month LIBOR (as such term
is defined in the Credit Agreement among MCG Finance Corporation, Lender and
Xxxxxx Financial, Inc., as Agent and Lender dated of even date herewith) plus
1.75% (the "Interest Rate") (computed on the basis of a 360 day year of twelve
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30-day months) on the unpaid principal amount hereof from time to time
outstanding from and after the date of this Note until the entire principal
amount hereof has been paid in full, payable annually in arrears on each
anniversary of the date hereof (each an "Interest Payment Date").
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This Note has been delivered as payment for the purchase by the Borrower of
certain shares of Class A Common Stock, par value $.01 per share, of the Lender
(the "Common Stock") represented by Certificate #A-1 pursuant to a Stock
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Purchase Agreement, dated as of the date hereof (the "Stock Purchase
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Agreement"). Contemporaneously with such purchase, the Lender, the Borrower
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and certain other investors have entered into a Stockholders' Agreement, dated
as of the date hereof (the "Stockholders' Agreement"), which sets forth certain
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rights and restrictions pursuant to which the Borrower holds such shares of
Common Stock. Payment of the principal of and interest on this Note is secured
pursuant to the terms of the Pledge Agreement, dated as of the date hereof,
between the Borrower and the Lender (the "Pledge Agreement"), pursuant to which
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the Borrower has pledged certain securities (the "Pledged Shares") to the
Lender, reference to which is made for a description of the entire collateral
provided thereby (the "Pledged Collateral") and the rights of the Lender in
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respect of the Pledged Collateral.
Notwithstanding anything herein or in any other agreement, instrument or
other document to the contrary, the Borrower shall not have any personal
liability of any kind for the repayment of the indebtedness evidenced by this
Note or for any claim of any kind based thereon or relating thereto, and the
Lender shall be entitled to and shall look solely to the Pledged Collateral as
its sole and exclusive remedy, including any cash or non-cash proceeds
therefrom, for the repayment of the indebtedness evidenced by this Note and any
other claim of any kind relating thereto or to the Pledge Agreement or arising
hereunder or thereunder.
This Note is subject to the following further terms and conditions:
1. Mandatory Prepayments. (a) The outstanding principal of this Note
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shall be mandatorily prepaid, together with accrued interest thereon, (i) upon
the sale of any of the Pledged Shares, to the extent of the Net Proceeds of such
sale and (ii) upon the payment of any cash distributions or cash dividends with
respect to any Pledged Shares, to the extent of the "Net Distribution" of such
distribution. "Net Proceeds" shall mean the proceeds of the sale of any of the
Pledged Shares after deduction for (i) all expenses paid or payable in
connection with such sale, and (ii) any payment in respect of any personal taxes
or other taxes on the proceeds of such sale. "Net Distribution" shall mean the
amount of the cash distribution or cash dividends after deduction for (i) all
expenses paid or payable in connection with such distributions or dividends, and
(ii) any payment in respect of any personal taxes or other taxes on the cash
distributions or cash dividends.
(b) Any repayments made under this Section 1 shall be first applied to
the payment of any unpaid and accrued interest and then to the payment of the
principal amount outstanding hereunder.
(c) Concurrently with any repayment of any portion of the principal
amount of this Note pursuant to this Section 1 hereof, the Lender shall make a
notation of such payment on the Loan and Repayment Schedule (as defined in
Section 6 hereof).
(d) Upon repayment of this Note in full, together with accrued
interest thereon, this Note shall be cancelled by the Lender. Notwithstanding
the foregoing, any principal which remains outstanding hereunder upon the sale
of all of the Pledged Shares (and upon prepayment of this Note as set forth in
paragraph (a)) shall be cancelled, and any remaining principal and accrued
interest owing hereon shall be forgiven, by the Lender, but only to the extent
that such sales were in a bona fide arm's length transaction with third parties
other than family members or Affiliates (as defined in the Pledge Agreement) and
effected with the objective of maximizing the price obtained for the Pledged
Shares sold.
2. Termination of Employment. Notwithstanding any other provision of
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this Note, the entire principal amount outstanding, and any accrued interest,
shall be due and payable on the earliest of (a) the Maturity Date, (b) three
months following (i) the Lender's termination of the Borrower's employment with
the Lender for Cause (as defined in the Borrower's Employment Agreement with the
Lender dated of even date herewith) or (ii) the Borrower's termination of its
employment with the Lender other than for Good Reason (as defined in the
Borrower's Employment Agreement with the Lender dated of even date herewith) and
(c) three years following (i) the Lender's termination of the Borrower's
employment with the Lender other than for Cause (as defined in the Borrower's
Employment Agreement with the Lender dated of even date herewith) or (ii) the
Borrower's termination of its employment with the Lender for Good Reason (as
defined in the Borrower's Employment Agreement with the Lender dated of even
date herewith).
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3. Payment and Prepayment. All payments and prepayments of principal
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of and interest on this Note shall be made to the Lender in lawful money of the
United States of America at the principal offices of the Lender. The Borrower
may, at the Borrower's option, prepay this Note in whole or in part at any time
or from time to time without penalty or premium. Any prepayments of any portion
of the principal amount of this Note shall be accompanied by payment of all
interest accrued but unpaid on the principal amount being prepaid.
4. Events of Default. (x) Upon the failure of the Borrower to pay
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(a) the principal on the Note when and as the same becomes due and payable,
whether at maturity thereof, upon the occurrence of an event requiring mandatory
prepayment under Section 1(a) hereof, or upon the Borrower's termination of
employment requiring payment in full under Section 2 hereof, or (b) the interest
on the Note when and as the same becomes due and payable, and such failure to
pay principal or interest continues for ten (10) days, or (y) if the Borrower
shall file a petition in bankruptcy or for an arrangement or any similar relief
pursuant to Title 11 of the United States Code or under any similar present or
future federal law or the law of any other jurisdiction or shall be adjudicated
a bankrupt or insolvent, or consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of all or any substantial part of the Borrower's property, or
shall make a general assignment for the benefit of creditors, or shall admit in
writing the Borrower's inability to pay the Borrower's debts generally as they
become due, or shall take any action in furtherance of any of the foregoing and
such event is not cured within 60 days (each of the events described in clauses
(x) and (y) being referred to herein as an "Event of Default"), then, and in any
such event, the Lender may declare, by written notice of the Event of Default
given to the Borrower, the entire principal amount of this Note to be forthwith
due and payable, whereupon the entire principal amount of this Note outstanding
and any accrued and unpaid interest hereunder shall become due and payable
without presentment, demand, protest, notice of dishonor and all other demands
and notices of any kind, all of which are hereby expressly waived. If an Event
of Default shall occur hereunder, the Borrower shall pay costs of collection,
including reasonable attorneys' fees, incurred by the Lender in the enforcement
hereof.
5. Waiver. No delay or failure by the Lender in the exercise of any
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right or remedy shall constitute a waiver thereof, and no single or partial
exercise by the Lender hereof of any right or remedy shall preclude other or
future exercise thereof or the exercise of any other right or remedy.
6. Loan and Repayment Schedule. Annexed hereto and made a part
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hereof is a schedule (the "Loan and Repayment Schedule") on which shall be shown
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all repayments of principal and accrued interest made by the Borrower to the
Lender and other information provided for on such Loan and Repayment Schedule.
The Borrower hereby appoints the Lender as its agent to make an appropriate
notation on the Loan and Repayment Schedule (or on a continuation of such Loan
and Repayment Schedule) evidencing the date and the amount of any principal
repayment or interest payment made hereunder or other information provided for
on the Loan and Repayment Schedule, provided that the Lender shall promptly
provide Borrower with a copy of each such notation and an annual statement of
all such repayments.
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7. Miscellaneous. (a) The validity, performance and enforcement of
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this Note shall be governed by the laws of the State of New York, without giving
effect to the principles of the conflicts of law thereof.
(b) If the date set for payment of principal or interest hereunder is
a Saturday, Sunday or legal holiday, then such payment shall be due on the next
succeeding business day.
(c) All notices and other communications hereunder shall be in writing
and will be deemed to have been duly given if delivered or mailed in accordance
with the Stockholders' Agreement.
(d) The headings contained in this Note are inserted for reference
only and shall not be deemed to constitute part of this Note or to affect the
construction hereof.
(e) Neither party may assign its rights or obligations under this Note
without the prior written consent of the other party.
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IN WITNESS WHEREOF, this Note has been duly executed and delivered by
the Borrower on the date first above written.
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[Name of Borrower]
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LOAN AND REPAYMENT SCHEDULE TO THE SECURED PROMISSORY NOTE
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Amount Amount of Accrued
Date of Principal Paid Interest Paid Notation Made By
______________________ ______________________ _____________________ ______________________
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NOTE: Additional pages of this Loan and Repayment Schedule to Note may be
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attached to the Note by the Lender as may be necessary to record the above
information regarding each loan.
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