EXHIBIT 10.4
THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AND PLEDGE AGREEMENT,
DATED AS OF APRIL 5, 2005, AMONG THE PAYEE HEREOF, THE AGENT FOR THE PAYEE AND
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT (TOGETHER WITH ITS SUCCESSORS AND
ASSIGNS) WHICH, AMONG OTHER THINGS, SUBORDINATES THE MAKER'S OBLIGATIONS TO THE
PAYEE TO THE MAKER'S OBLIGATIONS TO THE HOLDERS OF "SENIOR LIABILITIES", AS
DEFINED IN SUCH AGREEMENT AND SUBORDINATES THE LIENS OF THE AGENT FOR THE PAYEE
TO THE LIENS OF THE HOLDERS OF SUCH SENIOR LIABILITIES.
SECOND AMENDED AND RESTATED SUBORDINATED PROMISSORY NOTE
US$_________________ Dated: April 5, 2005
This Note is one of four second amended and restated promissory notes (the
"▇▇▇▇▇ NOTES") executed and delivered as of the date hereof by Vermont Pure
Holdings, Ltd. (the "MAKER"), a Delaware corporation, in favor of each of ▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇, respectively
(collectively, the "STOCKHOLDERS"). This Second Amended and Restated
Subordinated Promissory Note (the "NOTE") amends and restates in its entirety
the Amended and Restated Subordinated Promissory Note dated March 5, 2003 in the
original principal amount of ____________________ (the "AMENDED AND RESTATED
NOTE"), which Amended and Restated Note is hereby superceded and replaced in its
entirety.
PAYMENT TERMS. The Maker hereby promises to pay to the order of
_______________ (including any subsequent holder of this Note, the "PAYEE"), the
principal sum of ____________________, with interest on the unpaid principal sum
from time to time outstanding hereunder at an annual rate equal to the lesser of
(i) with respect to overdue amounts (except to the extent not paid when due
because payment is then prohibited pursuant to the terms of the Subordination
Agreement, as defined below), from and after the time due, seventeen per cent
(17%), compounded quarterly on each February 20, May 20, August 20 and November
20, and with respect to all other amounts, twelve per cent (12%) simple
interest; and (ii) the maximum lawful rate of interest; in each case to be
applied on the basis of the actual number of days elapsed and a 365-day year.
Subject to acceleration as provided herein, payments in respect of this
Note will be made on the following schedule:
(i) Interest will be payable in arrears for the three-month periods
ended on each January 31, April 30, July 31, and October 31, in each case
not more than 20 days after the end of such three-month period (i.e.,
February 20, May 20, August 20, and November 20). In addition to any other
applicable rights or remedies of the Payee, any interest not paid when due
will thereafter bear interest at the applicable rate stated above.
(ii) There are no scheduled principal payments required by this
Note.
(iii) The entire amount of indebtedness represented by this Note
will be due and payable not later than October 5, 2012.
Any amount owing hereunder that is not paid because prohibited pursuant to
the terms of the Subordination Agreement will be paid as soon as to do so is not
so prohibited.
ACCELERATION. At the Payee's option, the entire amount of indebtedness
represented by this Note will become due and payable immediately upon written
notice of acceleration given by the Payee to the Maker following any: (i)
liquidation or dissolution of the Maker, or other termination or winding-up of
its existence or business; (ii) sale of all or substantially all of the assets
or capital stock of the Maker; or (iii) acceleration of the due date of the
Senior Liabilities, as defined in the Subordination Agreement, or any other
indebtedness of the Maker for borrowed money.
In addition, the entire amount of indebtedness represented by this Note
will become due and payable, automatically and without any notice or other
action, immediately upon any: (i) appointment of a receiver for the Maker or its
assets; (ii) assignment by the Maker for the benefit of its creditors; or (iii)
institution by or against the Maker of any proceedings under bankruptcy,
insolvency, or similar laws, which in the case of any such institution against
the Maker, are not dismissed within 90 days.
For purposes of the preceding two paragraphs, any event of the types
described therein involving one or more of the Maker's subsidiaries will be
deemed to have occurred with respect to the Maker if such subsidiary or
subsidiaries represent more than 50% (by either book value or fair market value)
of the consolidated assets of the Maker and all of its consolidated
subsidiaries.
PREPAYMENT. The Maker will have the right to prepay the unpaid principal
amount of this Note in full at any time, or in part from time to time, on 30
days' prior written notice to the Payee and the other holders of the ▇▇▇▇▇
Notes; provided, that by written notice executed by all holders of the ▇▇▇▇▇
Notes given to the Maker within 20 days following any such notice, such holders
may require the Maker to allocate the aggregate amount proposed to be repaid to
all of them among such holders in such proportions as they may specify.
Any prepayment of this Note will include all accrued and unpaid interest
on the principal amount prepaid.
MAKER'S WAIVER OF PRESENTMENT, ETC. The Maker hereby waives presentment,
notice, protest, and all other demands and notices.
NO WAIVER BY PAYEE. The failure of the Payee to exercise any of its
rights, remedies, powers, or privileges hereunder in any instance will not
constitute a waiver thereof in respect of that or any other instance.
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ENFORCEMENT COSTS. The Maker will pay on demand all costs of collection,
including all court costs and attorneys' reasonable fees, paid or incurred by
the Payee in enforcing this Note and its rights hereunder.
PRO RATA PAYMENTS. Except to the extent provided above under the caption
"Prepayment" and except to the extent otherwise agreed in writing by all holders
of the ▇▇▇▇▇ Notes, any payments by the Maker in respect of the ▇▇▇▇▇ Notes will
be made pro rata in proportion to the respective amounts then owing by the Maker
in respect of each such note.
SUBORDINATION. This Note is subject to a separate Subordination and Pledge
Agreement, dated as of the date hereof, by and among the Payee, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, not individually but as Trustee of the ▇▇▇▇▇ ▇▇▇▇▇ Life Insurance
Trust u/t/a dated July 7, 1992, the ▇▇▇▇ ▇▇▇▇▇ Insurance Trust u/t/a dated July
7, 1992 and the ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ Irrevocable Trust u/t/a dated
December 16, 1991, as agent for the Payee and certain other holders of
indebtedness of the Maker (in such capacity, the "Agent") and Bank of America,
N.A., as administrative agent (together with its successors and assigns, the
"Administrative Agent"), which, among other things, (a) subordinates the Maker's
obligations to the Payee to the Maker's obligations to the holders of Senior
Liabilities as defined in such agreement, (b) subordinates the liens of the
Agent on the assets of the Maker to the liens of the Administrative Agent on
such assets and (c) restricts the amount and payment of principal and interest
hereunder and the rights of the holder of the Note to enforce any provision
hereof or to access any collateral security for this Note. Neither this Note nor
any rights hereunder may be transferred (and any attempt to do so will be void)
unless the proposed transferee first becomes a party to the Subordination
Agreement.
SECURITY. This Note is secured pursuant to the terms of the Amended and
Restated Security Agreement, dated as of the date hereof by and among the Maker,
the Payee, the original holders of the other ▇▇▇▇▇ Notes, and the Agent.
GOVERNING LAW. This Note will be governed by and interpreted and construed
in accordance with the internal laws of the State of Connecticut (without
reference to principles of conflicts or choice of law).
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This Note is executed and delivered on and as of the date first above
written.
VERMONT PURE HOLDINGS, LTD.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
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