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EXHIBIT 99(b)(3)
SUBORDINATED PROMISSORY NOTE
$5,300,000.00 June __, 2000
Minneapolis, Minnesota
FOR VALUE RECEIVED, the undersigned, , a
(the "Company"), hereby promises to pay to the order of
, a (the "Lender"), in
lawful money of the United States, at Minneapolis, Minnesota, the principal sum
of Five Million Three Hundred Thousand and 00/100 Dollars ($5,300,000.00) in
twelve (12) consecutive quarterly installments of Four Hundred Forty-one
Thousand Six Hundred Sixty-six and 00/100 Dollars ($441,666.66) commencing July
1, 2002 and continuing on the last day of each calendar quarter thereafter until
April 1, 2005, and to pay interest in like money on the unpaid balance hereof at
the rate of 12% per annum (computed on the basis of a 365- or 366-day year) from
the date hereof, payable quarterly, on the first day of October, January, April
and July in each year, commencing October 1, 2000, until payment in full of the
principal hereof.
For purposes of the following subordination provisions, the term "Senior
Debt" shall mean and include all principal, premium, if any, and interest on any
indebtedness for borrowed money owed by the Company.
The Senior Debt shall continue to be Senior Debt and entitled to the benefits of
the following subordination provisions irrespective of any amendment, increase,
modification or waiver of any term of the Senior Debt or extension or renewal of
the Senior Debt, except as expressly otherwise indicated in any amendments,
modifications, increases, extensions or renewals which are signed by the holder
thereof.
This Note and the indebtedness evidenced hereby are subordinate and junior
in right of payment to all Senior Debt of the Company, whether outstanding at
the date hereof or incurred hereafter, so that:
a. In the event the Company shall default in the payment of any
principal, premium, if any, or interest on, or any other sums payable
under the terms and provisions of the documents with respect to, any
Senior Debt when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, then, unless and until such default shall have been
completely cured or waived, no direct or indirect payment (in cash,
property or securities or by setoff or otherwise) shall be or agreed
to be made on account of this Note, or in respect of any redemption,
retirement, purchase or other acquisition of this Note.
b. Upon the happening of any event of default under the terms of any
Senior Debt, other than one subject to or described in paragraph (a)
above, which has the effect of permitting the holders of such Senior
Debt to accelerate the maturity thereof
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(whether or not such acceleration occurs), then, in any such event,
unless and until such event of default or default shall have been
completely cured or waived, no direct or indirect payment (in cash,
property or securities or by set-off or otherwise) shall be made or
agreed to be made on account of this Note, or in respect of any
redemption, retirement, purchase or other acquisition of this Note,
during the period commencing on receipt by the holder of this Note of
written notice of such event of default or default, and continuing for
180 days thereafter; provided that only one such notice shall be given
pursuant to the terms of this paragraph (b) in any 12 consecutive
calendar months. Any notice to the holder of this Note pursuant to
this paragraph (b) shall be by certified mail, return receipt
requested, addressed to the then current notice address of such holder
under the Agreement
c. In the event of
i) Any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors as such or its
property,
ii) Any proceeding for the liquidation, dissolution or other
winding-up of the Company, voluntary or involuntary, whether or
not involving insolvency or bankruptcy proceedings,
iii) Any assignment by the Company for the benefit of creditors, or
iv) Any other marshalling or distribution of the assets of the
Company,
All Senior Debt including any interest thereon accruing at the legal
rate after the commencement of any such proceedings shall first be
paid in full, in cash or cash equivalents, before any payment or
distribution, whether in cash, securities or other property (other
than securities of the Company or any other corporation, provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination
provisions with respect to this Note, to the payment of all Senior
Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), shall
be made to the holder of this Note. Any cash, securities or other
property which would otherwise (but for these subordination
provisions) be payable or deliverable in respect of principal on this
Note shall be paid or delivered directly to the holders of Senior Debt
in accordance with the priorities then existing among such holders
until all Senior Debt (including any interest thereon accruing at the
legal rate after the commencement of any such proceedings) shall have
been paid in full.
d. In the event that this Note is declared due and payable before its
expressed maturity because of the existence of a default (under
circumstances where the terms of subdivision (c) are not applicable)
then the holders of the Senior Debt outstanding at the time this Note
so becomes due and payable shall be entitled to
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receive payment in full in cash or cash equivalents of all the
principal, premium, if any, and interest on, or any other sums payable
under the terms and provisions of the documents with respect to, the
Senior Debt before the holder of this Note shall be entitled to
receive any payment on account of the principal on this Note.
e. So long as any Senior Debt is outstanding, the holder of this Note may
not declare this Note to be due and payable prior to its expressed
maturity, and will not take, demand, sue for, or receive from the
Company (and the Company will not make, give or permit, directly or
indirectly) any payment or security for the principal amount of this
Note or the indebtedness evidenced hereby, unless all of the holders
of the Senior Debt shall have declared such Senior Debt due and
payable; provided that under no circumstances should the holder hereof
undertake any such action if paragraphs (a) - (c) above are
applicable.
f. If any payment or distribution of any character, whether in cash,
securities or other property (other than shares of capital stock of
the Company or any other corporation provided for by a plan or
reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with
respect to this Note, to the payment of all Senior Debt at the time
outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment), shall be received by the
holder of this Note in contravention of any of the terms hereof and
before all the Senior Debt shall have been paid in full, such payment
or distribution shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the
Senior Debt at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all such
Senior Debt in full. In the event of failure of the holder of this
Note to endorse or assign any such payment, distribution or security,
each holder of Senior Debt is hereby irrevocably authorized to endorse
or assign the same.
g. No present or future holder of any Senior Debt shall be prejudiced in
the right to enforce subordination of this Note by any act or failure
to act on the part of the Company or such holder. Nothing contained
herein shall impair, as between the Company and the holder of this
Note, the obligation of the Company, which is unconditional and
absolute, to pay to the holder hereof the principal, premium, if any,
and interest hereon as and when the same shall become due and payable
in accordance with the terms hereof, nor shall anything herein prevent
the holder of this Note from exercising all remedies otherwise
permitted by law or hereunder upon default hereunder, subject to the
relative rights of the holders of the Senior Debt expressed herein.
h. Upon the indefensible payment in full of all Senior Debt, the holder
of this Note shall be subrogated to all rights of any holders of
Senior Debt to receive any further payments or distributions
applicable to the Senior Debt until this Note shall have been paid in
full, and, for the purposes of such subrogation, no payment or
distribution received by the holders of Senior Debt of cash,
securities
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or other property to which the holder of this Note would have been
entitled except for these subordination provisions shall, as between
the Company and its creditors other than the holders of Senior Debt,
on the one hand, and the holder of this Note, on the other, be deemed
to be a payment or distribution by the Company to or on account of
Senior Debt.
i. So long as the Senior Debt has not been indefensibly paid in full, the
holder of this Note shall not accept any voluntary prepayment hereof
without the consent of all of the Senior Debt.
j. Each holder of this Note by its acceptance of this Note undertakes and
agrees for the benefit of each holder of Senior Debt to execute,
verify, deliver and file any proofs of claim which any holder of
Senior Debt may at any time require in order to prove and realize upon
any rights or claims pertaining to this Note and to effectuate the
full benefit of the subordination contained herein; and upon failure
of any such holder so to do, any holder of Senior Debt shall be deemed
to be irrevocably appointed the agent and attorney-in-fact of such
holder to execute, verify, deliver and file any such proofs of claim.
k. The applicable holders of the Senior Debt may, from time to time, at
their respective sole discretion and without notice to the holder of
this Note, take any or all of the following actions: (a) retain or
obtain a security interest in any property to secure any of the Senior
Debt, (b) retain or obtain the primary or secondary obligation of any
other obligor or obligors with respect to any of the Senior Debt, (c)
extend or renew for one or more periods (whether or not longer than
the original period), alter or exchange any of the Senior Debt, or
release or compromise any obligation of any nature of any obligor with
respect to any of the Senior Debt, and (d) release its security
interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the
Senior Debt, or substitution or exchange for, all or any part of any
property securing any of the Senior Debt, or extend or renew for one
or more periods (whether or not longer than the original period) or
release, compromise, alter or exchange any obligations of any nature
of any obligor with respect to any such property.
l. The applicable holders of the Senior Debt may, from time to time,
without notice to the holder of this Note, assign or transfer any or
all of the Senior Debt or any interest therein; and, notwithstanding
any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Debt shall be and remain Senior Debt for
the purposes of this Note, and every immediate and successive assignee
or transferee of any of the Senior Debt or of any interest therein
shall, to the extent of the interest of such assignee or transferee in
the Senior Debt, be entitled to the benefits of the subordination
provisions of this Note.
m. No delay on the part of any holder of the Senior Debt in the exercise
of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by any holder of the Senior Debt or of any
right or remedy shall preclude other or
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further exercise thereof or the exercise of any other right or remedy;
nor shall any modification or waiver of any of the provisions of this
Note be binding upon the holders of the Senior Debt except as
expressly set forth in a writing duly signed and delivered on behalf
of such holders.
n. Any one or more of the following events, if they occur and are
continuing, will be deemed to be Events of Default under this Note,
without notice, except as expressly provided below:
i) Default in the payment of any installment of interest on this
Note as and when the same becomes due and payable, and the
continuance of such default for a period of two business days
subsequent to written or telephone notice thereof; or
ii) Default in the payment (whether or not prohibited by the
provisions of this Note) of the principal of this Note as and
when the same becomes due and payable either at maturity or upon
prepayment, and the continuance of such default for a period of
two business days subsequent to written or telephone notice
thereof; or
iii) Failure of the Company to observe or perform any other of the
covenants or agreements on the part of the Company contained in
this Note, and the continuance of such default for a period of
twenty (20) days after written notice (such written notice to
state it is a "Notice of Default" under this Note) of such
failure, specifying the failure, and requiring the Company to
remedy the same, has been given to the Company by the Lender; or
iv) Entry by a court having jurisdiction of a decree or order for
relief concerning the Company in an involuntary case under any
applicable bankruptcy, insolvency, reorganization, or other
similar law, or appointment of a receiver, liquidator, trustee,
assignee, custodian (or other similar official) of the Company or
of its property, or ordering of the winding up or liquidation of
its affairs, and the remaining in full force undischarged and
unstayed of such decree or order for a period of twenty (20)
days; or
v) Institution by the Company of a voluntary case under any
applicable bankruptcy, insolvency, reorganization, or other
similar law, or consent by the Company to the entry of an order
for relief in an involuntary case under such law, or consent of
the Company to the appointment of or taking possession by a
receiver, liquidator, trustee, assignee, custodian (or other
similar official) of it or of its property, or making by the
Company of its inability to pay its debts generally as they
become due, or taking by the Company of any corporate action
furthering any of the above purposes.
o. If an Event of Default occurs and is continuing, Lender may declare
the principal of this Note, together with any accrued and unpaid
interest, if not already due, to
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be due and payable immediately. Upon any such declaration, such
principal and interest will become due and payable, subject only to
any applicable subordination provisions of this Note.
p. If Lender declares the principal of this Note, together with all
accrued and unpaid interest on this Note, due and payable immediately,
Lender may proceed, subject, however, only to any applicable
subordination provisions of this Note, to protect and enforce the
rights of Lender by an action at law, suit in equity, or other
appropriate proceeding.
This Note is being delivered in the State of Minnesota and shall be
construed and enforced in accordance with the laws of such State.
, a corporation
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By:
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Its:
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