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EXHIBIT 10.35
This Note and the indebtedness evidence hereby are subordinated in the
manner and to the extent set forth in that certain TJS Subordination
Agreement No.1 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Subordination Agreement")
effective as of December 31, 1996, among TJS Partners, L.P., a New York
limited partnership ("Lender"), Security Associates International, Inc.,
a Delaware corporation ("SAI") and FINOVA Capital Corporation, in its
individual capacity and as agent for all lenders ("Senior Lender") to the
indebtedness (including interest) owed by SAI and certain affiliates of
SAI (collectively, the "Borrowers") to the holders of all the notes issued
pursuant to that certain Loan Agreement dated as of December 31, 1996 (as the
same may be amended, supplemented, restated or otherwise modified form
time to time, the "FINOVA Loan Agreement") among Borrowers and Senior Lender;
and each holder of this Note, by its acceptance hereof, shall be bound
by the subordination provisions of the Subordination Agreement.
PROMISSORY NOTE
$5,000,000.00 December 31, 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx
FOR VALUE RECEIVED, SECURITY ASSOCIATES INTERNATIONAL, INC., a Delaware
corporation ("BORROWER") promises to pay to the order of TJS Partners, L.P., a
New York limited partnership, its successors, designees or assigns ("LENDER"),
at its offices at 00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other
place or places as Lender may from time to time designate in writing, the
principal sum of Five Million and No/100 Dollars ($5,000,000.00) or, if less,
the aggregate unpaid principal amount of the Loan made by Lender pursuant to
Section 2 of the Loan Agreement (as hereinafter defined) at such times as are
specified in and in accordance with the provisions of the Loan Agreement, with
interest payable semiannually on the principal balance from time to time
remaining unpaid. Notwithstanding the foregoing, all outstanding principal,
interest, costs and expenses due hereunder shall be paid to Lender upon
termination of the Loan Agreement.
This Note is referred to in and was executed and delivered pursuant to
that certain Subordinated Loan Agreement of even date herewith between Borrower
and Lender (as amended, restated supplemented or modified from time to time, the
("LOAN AGREEMENT"), to which reference is hereby made for a statement of the
terms and conditions under which the loans evidenced hereby are to be repaid and
for a statement of remedies upon the occurrence of an "EVENT OF DEFAULT" as
defined therein. The Loan Agreement is incorporated herein by reference in its
entirety. All terms which are capitalized and used herein (which are not
otherwise specifically defined herein) and which are defined in the Loan
Agreement shall be used in this Note as defined in the Loan Agreement.
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This note evidences the "LOAN" as defined in the Loan Agreement made
and to be made to the Borrower under Section 2 of the Loan Agreement, and the
Borrower promises to pay interest at the office specified above on the loan
evidenced hereby at the rates and times specified therefor in the Loan
Agreement.
Borrower further promises to pay to Lender interest on the outstanding
unpaid principal amount hereof, as provided in the Loan Agreement, from the date
hereof until payment in full hereof as determined in accordance with the Loan
Agreement; provided, however, that during any Default Rate Period, Borrower
promises to pay to Lender interest on Borrower's Obligations at the Default Rate
as determined in accordance with the Loan Agreement. Interest shall be computed
on the basis of a 360-day year for the actual number of days elapsed. In no
contingency or event whatsoever shall the rate of interest paid by Borrower
under this Note exceed the maximum amount permissible under any law which a
court of competent jurisdiction shall in a final determination, deem applicable
hereto. In the event that such a court determines that Lender has received
interest hereunder in excess of the maximum amount permitted by such law, (i)
Lender shall apply such excess to any unpaid principal owed by Borrower to
Lender or, if the amount of such excess exceeds the unpaid balance of such
principal, Lender shall promptly refund such excess interest to Borrower and
(ii) the provisions hereof shall be deemed amended to provide for such
permissible rate.
Except as otherwise provided in the Loan Agreement, Borrower waives
presentment, demand and protest, notice of protest, notice of presentment and
all other notices and demands in connection with the enforcement of Lender's
rights hereunder, except as specifically provided and called for by this Note
and in the Loan Agreement, and hereby consents to, and waives notice of the
release, addition, or substitution, with or without consideration, of any
collateral or of any person liable for payment of this Note. Any failure of
Lender to exercise any right available hereunder or otherwise shall not be
construed as a waiver of the right to exercise the same or as a waiver of any
other right at any other time.
Whenever in this Note reference is made to Lender or Borrower, such
reference shall be deemed to include, as applicable, a reference to their
respective successors and assigns. The provisions of this Note shall be binding
upon and shall inure to the benefit of such successors and assigns. Borrower's
successors and assigns shall include without limitation, a receiver, trustee or
debtor in possession of or for Borrower.
The loan evidenced hereby has been made, and this Note has been
delivered, at Arlington Heights, Illinois and shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Illinois.
BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER AND
ARISING DIRECTLY OR INDIRECTLY OUT OF THE LOAN INSTRUMENTS SHALL BE LITIGATED IN
THE CIRCUIT COURT OF XXXX COUNTY, OR THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS. BORROWER HEREBY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY
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ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY
AGREES THAT PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN MAY BE SERVED IN THE MANNER PROVIDED FOR NOTICES HEREIN,
AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE
ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THE LOAN AGREEMENT. BORROWER
WAIVES ANY CLAIM THAT XXXX COUNTY, ILLINOIS OR THE NORTHERN DISTRICT OF ILLINOIS
IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. TO THE
EXTENT PROVIDED BY LAW, SHOULD BORROWER, AFTER BEING SO SERVED, FAIL TO APPEAR
OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE
NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, SUCH BORROWER SHALL
BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE COURT
AGAINST BORROWER AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS
OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWERS SET FORTH HEREIN SHALL
NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN
ANY OTHER FORUM OR THE TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY
OTHER APPROPRIATE JURISDICTION, AND BORROWER HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.
LENDER AND BORROWER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER ANY OF THE LOAN INSTRUMENTS OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND,
THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH
CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
Wherever possible each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note.
In the event of any conflict between any term, covenant or condition of
this Note or the Loan Agreement and any term, covenant or condition of the
Subordination Agreement, the provisions of the Subordination Agreement shall
govern.
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This entire Note, including, without limitation, each provision,
agreement, waiver, right or remedy contained herein, is subject to the terms,
conditions and limitations set forth in the Subordination Agreement.
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SECURITY ASSOCIATES INTERNATIONAL, INC.
BY: /s/ XXXXX X. XXXXXXX
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XXXXX X. XXXXXXX, PRESIDENT
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