Exhibit 99.2
TRANSBOTICS CORPORATION
6% SUBORDINATED NOTE
$262,500.00 Charlotte, North Carolina
November 30, 2007
FOR VALUE RECEIVED, the undersigned, Transbotics Corporation, a Delaware
corporation (the "Company"), promises to pay to the order of the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Trust, established under agreement dated September 17, 1988 (the
"Holder"), the principal sum of Two Hundred Sixty-Two Thousand, Five Hundred and
No/100 U.S. Dollars ($262,500.00) at the principal address of Holder in
Charlotte, North Carolina, or at such other location as is specified by written
notice from Holder to the Company, together with interest on the unpaid amount
of said principal sum from time to time outstanding at the rate per annum equal
to six percent (6%), with quarterly payments of interest commencing February 29,
2008. Principal and any accrued and unpaid interest shall be due and payable on
November 30, 2017.
If any payment of principal or interest under this Note shall be due on a
Saturday, Sunday or any day on which banks in Charlotte, North Carolina are
legally closed to business, such payment shall be made on the next succeeding
business day and interest shall continue to accrue on the unpaid balance of the
principal sum of this Note until the date payment is received by Holder.
This Note is subject to prepayment in whole or in part, by the Company at
any time by the Company providing thirty (30) days prior written notice and its
payment of the principal of and accrued interest on this Note; provided, further
that the Holder of the Note may request, by written demand delivered to the
Company at any time during the thirty (30) day period following the occurrence
(as evidenced by the Company's filing of the Form 10-KSB as described below) of
a Minimum Net Income Year (as hereinafter defined), a prepayment not to exceed
Eighty-Seven Thousand, Five Hundred Dollars ($87,500.00). For purposes hereof, a
Minimum Net Income Year shall mean, for any fiscal year of the Company's
operations commencing with the Company's November 30, 2008 fiscal year, the
Company's recording of at least Four Hundred Thousand Dollars ($400,000) of net
income (as reported in the Company's Form 10-KSB for such annual period). The
Holder of this Note is entitled to only one such prepayment during any single
fiscal year of the Company during the term of this Note. The payment shall be
made no later than thirty (30) days after Company's receipt of a timely notice
from ▇▇▇▇▇▇.
Notwithstanding any provision to the contrary contained herein, this Note
and the obligations hereunder are expressly subordinate to (i) the Company's
obligations to its bank or other financial institution providing revolving
credit, line of credit or other type of credit facility, and (ii) all prior
subordinated notes issued by the Company on September 23, 2003. By acceptance of
this Note, the Holder hereby acknowledges and agrees that rights under this Note
are subordinate to such rights and are subject to the terms and conditions set
for in the Annex A attached hereto. The foregoing subordination shall not impair
or otherwise affect the validity, as between the Company and the Holder, of this
Note.
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The loan funds evidenced by this Note are being issued by the Holder to the
Company in exchange for the Company's delivery of this Note as well as the
issuance of that certain Warrant to Purchase Common Stock of Transbotics
Corporation dated as of the date hereof between the Holder and the Company.
This Note is being delivered in the State of North Carolina and all sums
payable under this note are payable in the State of North Carolina. This note
shall be governed, construed and enforced in accordance with the substantive
laws of the United States and the State of North Carolina, without regard to
rules governing conflict of laws. The provisions of this note are severable, and
the invalidity or unenforceability of one or more of the provisions of this note
shall not affect or impair the validity or enforceability of the remaining terms
hereof.
IN WITNESS WHEREOF, the duly authorized officer of the Company has executed
this note on the date first above written.
TRANSBOTICS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Chief Executive Officer
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ANNEX A
TO
6% SUBORDINATED NOTE OF
TRANSBOTICS CORPORATION
1.01 Definitions. In addition to the terms defined above in this 6%
Subordinated Note, the following terms shall have the following meanings:
"Senior Credit Agreement" means any credit agreement first entered into
prior to the date hereof by and between the Company and a bank or other
financial institution providing for the establishment, continuation or
modification of a line of credit or revolving credit facility as amended,
restated, supplemented or otherwise modified from time to time and any and all
credit agreements relating to any refinancings respecting the Senior
Indebtedness.
"Senior Default" means any Default or Event of Default under the Senior
Credit Agreement or any document referred to therein.
"Senior Indebtedness" means the obligations of the Company as described in
the Senior Credit Agreement, and in each case any amendment, restatement,
extension, renewal, or other modification thereof, and any indebtedness for
borrowed money refinancing, in whole or in part, such obligation, provided that
the principal amount of such indebtedness to which the Subordinated Note is
subordinated shall not exceed $1,500,000.00.
"Subordinated Note" means the $262,500.00 6% Subordinated Note payable by
Transbotics Corporation to the order of the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust to
which this Annex A is attached.
1.02 Subordination Upon Distribution of Assets. Upon any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution or winding-up or total
or partial liquidation or reorganization of the Company whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
pursuant to any assignment for the benefit of creditors or any other marshalling
of assets and liabilities of the Company (any such event is referred to herein
as a "Bankruptcy"), all Senior Indebtedness shall first be paid in full in cash
before any payment is made on account of this Subordinated Note, or to acquire
this Subordinated Note for cash or property and any such payment or distribution
which otherwise would be payable or deliverable upon or with respect to this
Subordinated Note shall be paid or delivered directly to the holder of the
Senior Indebtedness for application to the payment or prepayment of the Senior
Indebtedness until the Senior Indebtedness shall have been paid in full in cash.
1.03 Limitations on Payment. Upon the occurrence of any Senior Default and
unless and until such Senior Default shall have been cured in a manner
satisfactory to the holder of the Senior Indebtedness or effectively waived in
writing by such holder, no direct or indirect payment (in cash, property,
securities or by set-off or otherwise) shall be made of or on account of this
Subordinated Note or in respect of any redemption, retirement, purchase or other
acquisition of this Subordinated Note. Upon any such cure or waiver of such
Senior Default, the Company may pay to the Holder all sums then due and payable
under this Subordinated Note.
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1.04 Payments and Distributions Received. If the Holder shall have received
any payment from or distribution of assets of the Company or proceeds of any
collateral, in respect of this Subordinated Note in contravention of the terms
of this Annex A, then and in such event such payment, distribution or proceeds
shall be received and held in trust for and shall be paid over or delivered to
the holder of Senior Indebtedness, to the extent necessary to pay all such
Senior Indebtedness in full in cash.
1.05 Proofs of Claim. If, while any Senior Indebtedness is outstanding, the
Company shall commence or be subject to any Bankruptcy, the Holder shall duly
and promptly take such action as the holder of Senior Indebtedness may
reasonable request to collect any payment with respect to this Subordinated Note
for the account of the holder of the Senior Indebtedness and to file appropriate
claims or proofs of claim in respect of this Subordinated Note. Upon the failure
of the Holder to take any such action, the holder of Senior Indebtedness is
hereby irrevocably authorized and empowered (in its own name or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every payment
or distribution referred to in respect of this Subordinated Note and to file
claims and proofs of claim with respect of this Subordinated Note and the Holder
hereby appoints the holder of Senior Indebtedness or its representative as
attorney-in-fact for such Holder to take any and all actions permitted by this
paragraph to be taken by such ▇▇▇▇▇▇.
1.06 Subrogation. After all amounts payable under or in respect of Senior
Indebtedness are paid in full in cash or in a manner satisfactory to the holders
thereof, the Holder shall be subrogated to the rights of the holder of Senior
Indebtedness to receive payments or distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the Holder
have been applied to the payment of Senior Indebtedness. A distribution made
under this Annex A to a holder of Senior Indebtedness which otherwise would have
been made to the Holder is not, as between the Company and the Holder, a payment
by the Company on Senior Indebtedness.
1.07 Subordination May Not Be Impaired by the Maker. No right of any holder
of any Senior Indebtedness to enforce the subordination of this Subordinated
Note shall be impaired by any failure to act by the Company or such holder of
Senior Indebtedness or by the failure of the Company or such holder to comply
with this Subordinated Note. The provisions of this Annex A shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Senior Indebtedness is rescinded or must otherwise be returned by any
holder of Senior Indebtedness as a result of the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
1.08 Subordination Not Impaired: Benefit of Subordination. The Holder
agrees and consents that without notice to or assent by such Holder, and without
affecting the liabilities and obligations of the Company and any Holder and the
rights and benefits of the holders of the Senior Indebtedness set forth in this
Annex A:
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(a) The obligations and liabilities of the Company and any other party or
parties for or upon the Senior Indebtedness may, from time to time, be amended,
restated, renewed, refinanced, extended, compromised, supplemented, terminated,
waived or released or otherwise modified (but shall not be increased to a
principal amount exceeding $1,500,000.00;
(b) The holder of Senior Indebtedness, and any representative or
representatives acting on behalf thereof, may exercise or refrain from
exercising any right, remedy or power granted by or in connection with any
agreements relating to the Senior Indebtedness; and
(c) Any balance or balances of funds with the holder of Senior Indebtedness
at any time outstanding to the credit of the Company may, from time to time, in
whole or in part, be surrendered or released;
all as the holder of the Senior Indebtedness, and any representative or
representatives acting on behalf thereof, may deem advisable, and all without
impairing, abridging, diminishing, releasing or affecting the subordination of
this Subordinated Note to the Senior Indebtedness provided for herein.
1.9 Amendments. The provisions of this Annex A are for the benefit of the
holders from time to time of Senior Indebtedness and, so long as any Senior
Indebtedness remains outstanding, may not be modified, rescinded or canceled in
whole or in part without the prior written consent thereto of the holder of
Senior Indebtedness.
1.10 Covenants of Holders. Until all of the Senior Indebtedness has been
paid in full in cash.
(a) The Holder shall not sell, assign, transfer or pledge this Subordinated
Note unless expressly subject to the terms of this Annex A or take any security
or collateral to secure this Subordinated Note;
(b) The Holder shall not release, exchange, extend the time of payment of,
compromise, set off or otherwise discharge any part of this Subordinated Note or
modify or amend this Subordinated Note in such manner as to have an adverse
effect upon the rights of the holder of Senior Indebtedness without such
holder's prior written consent;
(c) The Holder hereby undertakes and agrees for the benefit of the holder
of Senior Indebtedness that, upon the occurrence and during the continuance of a
Senior Default, it shall take any actions reasonably requested by the holder of
Senior Indebtedness to effectuate the full benefit of the subordination
contained herein; and
(d) The Holder hereby undertakes and agrees for the benefit of the holder
of Senior Indebtedness that he will not vote his claim or claims with respect to
this Subordinated Note in a manner inconsistent with the terms of this Annex A.
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1.11 Miscellaneous.
(a) To the extent permitted by applicable law, the Holder of this
Subordinated Note and the Company hereby waive (i) notice of acceptance hereof
by the holder of the Senior Indebtedness and (ii) all diligence in the
collection or protection of or realization upon the Senior Indebtedness.
(b) The Company and the Holder hereby expressly agree that the holder of
Senior Indebtedness may enforce any and all rights derived herein by suit,
either in equity or law, for specific performance of any agreement contained in
this Annex A or for judgment at law and any other relief whatsoever appropriate
to such action or procedure.
(c) The Holder acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, and inducement and a consideration to
the holder of Senior Indebtedness, whether such Senior Indebtedness was created
or acquired before or after the issuance of this Agreement, and the holder of
Senior Indebtedness shall be deemed conclusively to have relied upon such
subordination provisions in acquiring and continuing to hold such Senior
Indebtedness.
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