Document:

Exhibit 10.137

 

AMENDED AND RESTATED SERIES C PROMISSORY NOTE

 

	
  $6,738,281.00

  	
   

  	
  New
  York, New York

  
	
   

  	
   

  	
  March
  17, 2004

  

 

FOR VALUE RECEIVED, the undersigned [i] THERMOVIEW INDUSTRIES, INC., a
Delaware corporation (“ThermoView”), [ii] AMERICAN HOME DEVELOPERS CO.,
INC., a California corporation (“American Home”), [iii] FIVE STAR
BUILDERS, INC., a California corporation (“Five Star”), [iv] KEY HOME
CREDIT, INC.,  a Delaware corporation (“Key
Home”), [v] KEY HOME MORTGAGE, INC., a Delaware corporation (“Key
Home Mortgage”), [vi] LEINGANG SIDING AND WINDOW, INC., a North Dakota
business corporation (“Leingang Siding”),  [vii] PRECISION WINDOW MFG., INC., a Missouri corporation (“Precision”),
[viii] PRIMAX WINDOW CO., a Kentucky corporation (“Primax”),
[ix] ROLOX, INC., a Kansas corporation (“Rolox”), [x] TD WINDOWS,
INC., a Kentucky corporation (“TD Windows”), [xi] THERMAL LINE
WINDOWS, INC., a North Dakota corporation (“Thermal Line”),
[xii] THERMOVIEW OF MISSOURI, INC., a Missouri corporation (“ThermoView-Missouri”),
[xiii] THERMO-TILT WINDOW COMPANY, a Delaware corporation (“Thermo-Tilt”),
[xiv] THERMO-SHIELD OF AMERICA (ARIZONA), INC., an Arizona corporation (“Thermo-Shield
Arizona”), [xv] THERMO-SHIELD OF AMERICA (MICHIGAN), INC., a Michigan
corporation (“Thermo-Shield Michigan”), [xvi] THERMO-SHIELD COMPANY,
LLC, an Illinois limited liability company (“Thermo-Shield Company”),
[xvii] THERMO-SHIELD OF AMERICA (WISCONSIN), LLC, a Wisconsin limited liability
company (“Thermo-Shield Wisconsin”), [xviii] THERMOVIEW ADVERTISING
GROUP, INC., a Delaware corporation (“ThermoView Advertising”) and [xix]
THOMAS CONSTRUCTION, INC., a Missouri corporation (“Thomas Construction”),
(ThermoView, American Home, Five Star, Key Home, Key Home Mortgage, Leingang
Siding, Precision, Primax, Rolox, TD Windows, Thermal Line,
ThermoView-Missouri, Thermo-Tilt, Thermo-Shield Arizona, Thermo-Shield
Michigan, Thermo-Shield Company, Thermo-Shield Wisconsin, ThermoView
Advertising and Thomas Construction individually are referred to in this Agreement
as a “Borrower” and collectively as the “Borrowers”) having an
address in care of ThermoView Industries, Inc., 5611 Fern Valley Road,
Louisville, Kentucky 40228, hereby promises and agrees to pay to the order of
GE Capital Equity Investments, Inc., a Delaware corporation (the “Series C
Lender”), having an address of 120 Long Ridge Road, Stamford, Connecticut
06927, the aggregate principal sum of SIX MILLION SEVEN HUNDRED THIRTY EIGHT
THOUSAND TWO HUNDRED EIGHTY-ONE AND NO/100 DOLLARS ($6,738,281.00), or so much
thereof as may be advanced hereunder, together with interest thereon as
hereinafter provided, in lawful money of the United States of America, in the
manner set forth herein, on or before the Loan Expiration Date as that term is
defined in the Loan Agreement (as hereinafter defined).

 

1.     Other
Loan Documents. This Series C Note is issued in
connection with a Loan Agreement dated August 31, 1998, as amended, to which
the Borrowers, the Series A Lender, the Series B Lender and the Series C Lender
(as defined therein) are parties, (the “Loan Agreement”) the terms of
which are incorporated herein by reference and other documents executed and
delivered in connection therewith (the “Loan Documents”; terms not
otherwise defined herein are used herein as therein defined in the Loan
Documents), and is secured by the property described in the Loan Documents and
by such other collateral as previously may have been or may in the future be
granted to the Series C Lender (or the Collateral Agent for the Lenders) to
secure this Series C Note.

 

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2.             Rate
of Interest. 
This Series C Note will bear interest at a rate per annum (computed on
the basis of a year of 360 days and the actual number of days elapsed) equal to
eight percent (8%).

 

3.             Payment
Terms.  (A) During the period
beginning April 30, 2005 and through and including December 31, 2005, principal
of this Series C Note shall be paid in monthly payments of $50,000 and shall be
payable on the last day of each calendar month and (B) thereafter
principal of this Series C Note shall be paid in monthly payments of $100,000
and shall be payable on the last day of each calendar month.  The balance of the principal shall be paid
in a single payment on the Loan Expiration Date.

 

Interest on this Series C Note shall be payable on the last day of each
calendar month and on any and each date that the principal of this Series C
Note is paid in full, and on the Loan Expiration Date.  Notwithstanding anything else herein to the
contrary, (i) during the period commencing December 1, 2003 and through
and including September 30, 2004 (the “PIK Period”), any interest not
paid by the Borrowers in cash on the date such interest is due shall be
paid-in-kind and added to the principal amount outstanding under this Series C
Note on the date such interest shall be payable only in cash pursuant to the
terms of this Series C Note and (ii) from October 1, 2004 and thereafter any
and all interest shall be payable only in cash.  All increased principal amounts outstanding under this Series C
Note as a result of the foregoing sentence shall bear interest from the date of
such increase at the interest rate provided for herein.  The Borrowers hereby acknowledge and agree
that the paid-in-kind interest which has accrued during the PIK Period prior to
the date hereof is not reflected in the stated principal amount of this Series
C Note indicated in the introductory paragraph or otherwise herein.

 

If any payment under this Series C Note shall become due on a Saturday,
Sunday or public holiday under the laws of the State where the Series C
Lender’s office indicated above is located, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in
computing interest in connection with such payment. The Borrowers hereby
authorize the Series C Lender to charge any Borrower’s deposit account at the
Series C Lender for any payment when due hereunder. Payments received will be
applied to charges, fees and expenses (including attorneys’ fees), accrued
interest and principal in any order the Series C Lender may choose, in its sole
discretion.  “Business Day” shall
mean any day other than a Saturday or Sunday or a legal holiday on which banks
are authorized or required to be closed for business in New York, New York.

 

4.             Late
Payments; Default Rate. 
If the Borrowers fail to make any payment of principal, interest or
other amount coming due pursuant to the provisions of this Series C Note within
ten (10) calendar days of the date due and payable, the Borrowers also shall
pay to the Series C Lender a late charge equal to the lesser of two percent
(2%) of the amount of such payment or $25.00. Such ten day period shall not be
construed in any way to extend the due date of any such payment. The late
charge is imposed for the purpose of defraying the Series C Lender’s expenses
incident to the handling of delinquent payments and is in addition to, and not
in lieu of, the exercise by the Series C Lender of any rights and remedies
hereunder, under the other Loan Documents or under applicable laws, and any
fees and expenses of any agents or attorneys which the Series C Lender may
employ. Upon maturity, whether by acceleration, demand or otherwise, and at the
option of the Series C Lender upon the occurrence of any Event of Default (as
hereinafter defined)

 

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and during the
continuance thereof, this Series C Note shall bear interest at a rate per annum
(based on a year of 360 days and actual days elapsed) which shall be two
percentage points (2%) in excess of the interest rate in effect from time to
time under this Series C Note but not more than the maximum rate allowed by law
(the “Default Rate”). The Default Rate shall continue to apply whether
or not judgment shall be entered on this Series C Note.

 

5.             Prepayment.  Principal of this Series C Note may be
repaid or prepaid in whole or in part without penalty or premium at any time,
but only in the amount of $10,000.00, or integral multiples thereof, or
an amount equal to the entire unpaid principal balance of this Series C Note,
and only provided Borrowers have given to the Series C Lender not less
than three (3) Business Days prior written notice of such prepayment.  Following repayment in full of the Series A
Note and the Series B Notes, on July 31 and November 15 of each calendar year,
the Borrowers shall prepay this Series C Note in an amount outstanding equal to
100% of the Borrowers’ cash, cash equivalents and marketable securities balance
on its balance sheet which, collectively, is in excess of $1,000,000 as of June
30 or October 15, as applicable, of that year. 
Upon termination of that certain Amended and Restated Reimbursement
Agreement dated as of March 17, 2004 among GE Capital Equity Investments, Inc.
and the Borrowers (the “Reimbursement Agreement”) and fulfillment by the
Borrowers of all of their obligations thereunder, any remaining balance in the
Cash Account (as defined in the Reimbursement Agreement) shall be used to prepay
this Series C Note.  Subject to the
provisions of Section 8 hereof, any prepayment of this Series C Note and any
prepayments in respect of the second and third sentence of this Section 5 shall
be applied in the following order: (i) then due and payable fees and expenses;
(ii) then due and payable principal and interest payments on the Reimbursement
Obligations; (iii) then due and payable interest payments on the Series A Note,
the Series B Notes and the Series C Note on a pro  rata basis;
(iv) principal payments on the Series A Note and the Series B Notes on a pro
rata basis; and (v) principal payments on the Series C Note.  Any repayments or optional prepayments of
this Series C Note at maturity, including in connection with a sale or merger
of any Borrower or a sale of all or substantially all of the assets of any
Borrower, shall be applied in the following order: (i) then due and payable
fees and expenses; (ii) then due and payable principal and interests on the
Reimbursement Obligations; (iii) then due and payable interest payments on the
Series A Note, the Series B Notes and the Series C Note on a pro  rata
basis; (iv) principal payments on the Series A Note; (v) principal payments on
the Series B Notes; and (vi) principal payments on the Series C Note.

 

6.             Events
of Default. 
The occurrence of any of the following events will be deemed to be an “Event
of Default” under this Series C Note: (i) the nonpayment of any principal,
interest or other indebtedness under this Series C Note or the Loan Agreement
when due; (ii) the occurrence of any event of default or default and the lapse
of any notice or cure period under any Loan Document, including but not limited
to the Series A Notes and the Series B Notes, or any other debt, liability or
obligation to the Series C Lender of any Obligor; (iii) the filing by or
against any Obligor of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against any Obligor, such proceeding is
not dismissed or stayed within 30 days of the commencement thereof); (iv) any
assignment by any Obligor for the benefit of creditors, or any levy,
garnishment attachment or similar proceeding is instituted against any property
or any Obligor held by or deposited with the Series C Lender; (v) a default
with respect to any other indebtedness of any Obligor for borrowed money, if
the effect of such

 

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default is to cause
or permit the acceleration of such debt; (vi) the commencement of any
foreclosure or forfeiture proceeding, execution or attachment against any
collateral securing the obligations of any Obligor to the Series A, B or C
Lenders; (vii) the entry of a final judgment against any Obligor in excess of
$100,000, which judgment has not been stayed, discharged or appealed within ten
(10) Business Days of the date of entry thereof, (viii) the Borrower ceases
doing business as a going concern; (ix) the revocation or attempted revocation,
in whole or in part, of any guarantee for the benefit of the Series C Lender by
any Guarantor; (x) any representation or warranty made by any Obligor to the
Series C Lender in any Loan Document, or any other documents now or in the future
securing the obligations of any Obligor to the Series C Lender, is false,
erroneous or misleading in any material respect; (xi) the failure by Thermoview
to perform or observe the financial covenant contained in Section 4.I of the
Loan Agreement; or the occurrence of any Event of Default (as defined in any
Loan Documents or any other documents now or in the future securing the
obligations of any Obligor to the Series A, B or C Lenders) or any default
under any of the Loan Documents or such other documents that does not have a
defined set of “Events of Default”  and the lapse of any notice or
cure period provided in the Loan Documents or such other documents with respect
to such default. As used herein, the term “Obligor” means any Borrower
and any Guarantor, and the term “Guarantor” means any guarantor of the
obligations of any Borrower to the Series C Lender existing on the date of this
Series C Note or arising in the future.

 

Upon the occurrence and during the continuance of an Event of Default:
(a) if an Event of Default specified in clauses (iii) or (iv) above shall
occur, the outstanding principal balance and accrued interest hereunder
together with any additional amounts payable hereunder shall be immediately due
and payable without demand or notice of any kind; (b) if an Event of Default
specified in clauses (i), (vii) or (xi) above, or Section 6.E. or 6.F. of the
Loan Agreement, or an Event of Default resulting from a breach of Section 5.G.
of the Loan Agreement, shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder, at the option of the Requisite A Lenders or, if the Series A Note
shall no longer be outstanding, the Requisite Lenders, and without demand or
notice of any kind, may be accelerated and become immediately due and payable;
(c) if an Event of Default specified in clause (v) shall occur in connection
with the obligations under that certain Securities Purchase Agreement, dated as
of July 8, 1999, between the Series C Lender and Thermoview, as amended from
time to time, shall be accelerated as a result of a default thereunder pursuant
to Sections 5.1(h) or 7.1(a) thereof, at the option of the Requisite A Lenders
or, if the Series A Note shall no longer be outstanding, the Requisite C
Lender, and without demand or notice of any kind, may be accelerated and become
immediately due and payable; (d) if any other Event of Default shall occur and
the same shall continue unremedied for a period of 30 days thereafter, the
outstanding principal balance and accrued interest hereunder together with any
additional amounts payable hereunder, at the option of the Requisite Lenders
and without demand or notice of any kind, may be accelerated and become
immediately due and payable; (e) at the option of the Requisite Lenders will
bear interest at the Default Rate from the date of the occurrence of the Event
of Default; and (f) the Series C Lender may exercise from time to time any of
the rights and remedies available to the Series C Lender under the Loan
Documents or under applicable law.

 

Notwithstanding anything contained in this Section 6, upon the filing
of a bankruptcy of Thermoview, whether voluntary or involuntary, the Series A

 

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Lender and/or the Series B Lenders shall have the right to file a proof
of claim on the Series C Lender’s behalf in respect of the Series C Note.

 

7.             Right
of Setoff. 
In addition to all liens upon and rights of setoff against the money,
securities or other property of each Borrower given to the Series C Lender by
law, the Series C Lender shall have, with respect to any Borrower’s obligations
to the Series C Lender under this Series C Note and to the extent permitted by
law, a contractual possessory security interest in and a contractual right of
setoff against, and each Borrower hereby assigns, conveys, delivers, pledges
and transfers to the Series C Lender all of each Borrower’s right, title and
interest in and to, all deposits, moneys, securities and other property of such
Borrower now or hereafter in the possession of or on deposit with, or in
transit to, the Series C Lender whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, all IRA, Keogh, employee
withholding accounts, and trust accounts. Every such security interest and
right of setoff may be exercised without demand upon or notice to any Borrower.
Every such right of setoff shall be deemed to have been exercised immediately
upon the occurrence of an Event of Default hereunder without any action of the
Series C Lender, although the Series C Lender may enter such setoff on its
books and records at a later time.

 

8.             Subordination,
Priority and Payment Over Of Proceeds In Certain Events.

 

9.             The
Borrowers and the Lenders and any other holder of a Note (the Lenders and such
holders being hereinafter referred to collectively as “Holders”)
covenant and agree that all payments of the principal of and interest in
respect of the Series B Notes and the Series C Note shall be subordinated in
accordance with the provisions of this Section 8 to the prior payment in
full of the Senior Debt.  For purposes
of this Section 8, (x) the term “Senior Debt” shall mean, (i) with
respect to the Series B Note, the Series A Note, and (ii) with respect to the
Series C Note, the Series A Note and the Series B Notes, and each of clauses
(i) and (ii) above shall include principal of and premium, if any, and interest
(including at the default rate) provided for hereunder after the commencement
of (A) any bankruptcy proceedings involving any Borrower or (B) proceedings
involving any Borrower of the type referred to in clause (b) hereof, in
each case, whether or not allowed as a claim against any Borrower in any such
proceeding) on all loans and other extensions of credit under, and all
expenses, fees, reimbursements, indemnities and other amounts owing pursuant to
the Senior Debt, to the extent permitted to be incurred pursuant to the Loan
Documents , and (y) the term “Subordinated Debt” shall mean, (i) with
respect to the Series A Note, the Series B Notes and the Series C Note, and
(ii) with respect to the Series B Notes, the Series C Note.  The Borrowers and the Lenders further covenant
and agree that all payments in respect of this Series C Note shall be
subordinated in accordance with the provisions of this Section 8.

 

10.           Upon
payment or distribution of assets or securities of the Borrowers of any kind or
character, whether in cash, property or securities, upon any dissolution or
winding up or total or partial liquidation or reorganization of the Borrowers,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings or upon an assignment for the benefit of creditors or any
other marshalling of the assets and liabilities of the Borrowers, the Senior
Debt shall first be paid in full in cash, or payment provided for in cash or
cash equivalents in a

 

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manner satisfactory
to the Holder thereof, before any direct or indirect payments or distributions,
including, without limitation, by exercise of set-off, of any cash, property or
securities on account of principal of (or premium, if any) or interest on the
Subordinated Debt, and to that end the Senior Debt Holder shall be entitled to
receive directly, for application to the payment thereof (to the extent
necessary to pay the Senior Debt in full after giving effect to any
substantially concurrent payment or distribution to or provision for payment to
the Senior Debt Holder in respect of the Senior Debt), any payment or
distribution of any kind or character, whether in cash, property or securities,
in respect of the Subordinated Debt. 
The provisions of this Section shall not be applicable to payments made
in accordance with the terms of this Series C Note and received prior to the
commencement of any such dissolution or winding up or total or partial
liquidation or reorganization of the Borrowers, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrowers.

 

11.           No
direct or indirect payment by or on behalf of the Borrowers of principal of
(premium, if any), or interest on, the Subordinated Debt, whether pursuant to
the terms of Subordinated Debt, upon acceleration or otherwise, shall be made
if at the time of such payment there exists (i) a default in the payment of all
or any portion of principal of (premium, if any), interest on, fees or other
amounts owing in connection with any Senior Debt or (ii) any default other than
a default described in clause (i) above under any document or instrument
governing or evidencing any Senior Debt, and, in either case, such default
shall not have been cured or waived in writing.

 

12.           Rights
and Obligations of Holders.

 

(d)           In the
event that, notwithstanding anything contained in Section 8 prohibiting such
payment or distribution, the Holders shall have received any payment on account
of the Subordinated Debt at a time when such payment is prohibited by such
provision before the Senior Debt is paid in full, then and in such event, such
payment or distribution shall be received and held in trust by the Holders
apart from their other assets and paid over or delivered to the holders of the
Senior Debt remaining unpaid to the extent necessary to pay in full in cash the
principal of (premium, if any), and interest on, such Senior Debt in accordance
with its terms and after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.

 

(e)           Nothing
contained in this Section 9 will limit the right of the Holders of Subordinated
Debt to take any action to accelerate the maturity of the Subordinated Debt
pursuant to Section 6 hereof, provided, however, that all Senior
Debt then due or thereafter declared to be due shall first be paid in full
before the Holders are entitled to receive any payment from any Borrowers of
principal of, or interest on, the Note.

 

(f)            Upon
any payment or distribution of assets or securities referred to in this
Section 9, the Holders shall be entitled to rely upon any order or decree
of a court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making any such payment or

 

6

 

distribution,
delivered to the Holders for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of Senior Debt and other
Indebtedness of the Borrowers, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 9.

 

13.           Rights
of Holders of Senior Debt Not To Be Impaired.

 

14.           No
right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act by any such holder, or by any
noncompliance by the Borrowers with the terms and provisions and covenants
herein regardless of any knowledge thereof such holder may have or otherwise be
charged with.

 

15.           The
provisions of these Sections 8-15 are intended to be for the benefit of,
and shall be enforceable directly by, the holders of the Senior Debt.  The Borrowers and each Holder of any Note,
by its acceptance thereof, acknowledges that the holders of the Senior Debt are
relying upon the provisions of these Sections 8-15 in extending such
Senior Debt.

 

16.           Subrogation.

 

17.           Upon
the payment in full of all Senior Debt, the Holders shall be subrogated to the
extent of the payments or distributions made to the holders of, or otherwise
applied to payment of, the Senior Debt pursuant to the provisions of these Sections
8-15 and to the rights of the holders of Senior Debt to receive payments or
distributions of assets of the Borrowers made on the Senior Debt until this
Series C Note shall be paid in full; and for the purposes of such subrogation,
no payments or distributions to holders of Senior Debt of any cash, property or
securities to which Holders of this Series C Note would be entitled except for
the provisions of these Sections 8-15 and no payment over pursuant to
the provisions of these Sections 8-15 to holders of Senior Debt by the
Holders, shall, as between the Borrowers, its creditors other than holders of
Senior Debt and the Holders, be deemed to be payment by the Borrowers to or on
account of Senior Debt, it being understood that the provisions of these Sections
8-15 are solely for the purpose of defining the relative rights of the
holders of Senior Debt, on the one hand, and the Holders, on the other hand.

 

18.           If any
payment or distribution to which the Holders would otherwise have been entitled
but for the provisions of these Sections 8-15 shall have been applied,
pursuant to the provisions of these Sections 8-15, to the payment of
Senior Debt, then and in such case, the Holders shall be entitled to receive
from the holders of Senior Debt at the time outstanding any payments or
distributions received by such holders of Senior Debt in excess of the amount
sufficient to pay all Senior Debt in full.

 

19.           Obligations
of Borrowers Unconditional.

 

20.           Nothing
contained in these Sections 8-15 or elsewhere in the Loan Documents or
in this Series C Note is intended to or shall impair, as between the Borrowers
and the Holders, the obligations of the Borrowers, which are absolute and
unconditional, to pay to the Holders the principal of (premium, if any), and
interest on, this Series C Note as and when the same shall become due and
payable in accordance with its terms, or is intended to or

 

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shall affect the
relative rights of the Holders and creditors of the Borrowers other than the
holders of the Senior Debt, nor shall anything herein or therein prevent any
Holder from exercising all remedies otherwise permitted by applicable law upon
the occurrence of an Event of Default under the Loan Documents or under this
Series C Note, subject to the rights, if any, under these Sections 8-15
of the holders of Senior Debt in respect of cash, property or securities of the
Borrowers received upon the exercise of any such remedy.

 

21.           The
failure to make a payment on account of principal of, or interest on, this
Series C Note by reason of any provision of these Sections 8-15 shall not
be construed as preventing the occurrence of an Event of Default hereunder.

 

22.           Notice
to Holders. 
Each Borrowers shall give prompt written notice to each Holder of any
fact known to such Borrower which would prohibit the making of any payment on
or in respect of this Series C Note, but failure to give such notice shall not
affect the subordination of the Subordinated Debt to the Senior Debt provided
in Section 8. 
Notwithstanding the provisions of these Sections 8-15 or any
other provision of the Loan Documents or this Series C Note, no Holder shall be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or in respect hereof, unless and until the Holders
shall have received written notice thereof from a Borrower or a representative
of or holder of Senior Debt, and, prior to the receipt of any such written
notice, subject to the provisions of these Sections 8-15 the Holders
shall be entitled in all respects to assume no such facts exist.  Nothing contained in this Section 13
shall limit the right of the holders of Senior Debt to recover payments as
contemplated by Sections 8 and 9.

 

23.           Right
of Any Holder as Holder of Senior Debt.  Any Holder in its individual capacity shall
be entitled to all the rights set forth in these Sections 8-15 with
respect to any Senior Debt which may at any time be held by it, to the same
extent as any other holder of Senior Debt, and nothing in this agreement shall
deprive such Holder of any of its rights as such holder.

 

24.           Reinstatement.  The provisions of these Sections 8-15
shall continue to be effective or be reinstated, and the Senior Debt shall not
be deemed to be paid in full, as the case may be, if at any time any payment of
any of the Senior Debt is rescinded or must otherwise be returned by the holder
thereof upon the insolvency, bankruptcy or reorganization of the Borrowers or
otherwise, all as though such payment had not been made.

 

25.                           No
Novation. 
This Amended and Restated Series C Note does not constitute a novation
or waiver of the obligations and liabilities existing under that certain
Amended and Restated Series C Note dated as of June 30, 2003 (the “Existing
Series C Note”) and issued by the Borrowers, including any obligation or
action required to be performed prior to the date hereof or to evidence payment
of all or any of such obligations and liabilities.  The Borrowers hereby agree that this Series C Note amends and
restates in its entirety the Existing Series C Note and that from and after the
date hereof, the Existing Series C Note shall be of no further force or effect
except as to evidence the incurrence of the obligations of the Borrowers
thereunder and the representations and warranties made thereunder.  The Borrowers further agree that (a) all of
the obligations of the Borrowers under the Existing Series C Note are in all
respects continuing (as amended

 

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hereby), with the
terms thereof being modified to the extent provided herein; and (b) the liens and
security interests as granted under the Security Documents securing payment of
such obligations are in all respects continuing and in full force and effect
and secure the payment of such obligations.

 

26.           Miscellaneous.  No delay or omission of the Series C Lender
to exercise any right or power arising hereunder shall impair any such right or
power or be considered to be a waiver of any such right or power, nor shall the
Series C Lender’s action or inaction impair any such right or power. Each
Borrower agrees to pay on demand, to the extent permitted by law, all costs and
expenses incurred by the Series C Lender in the enforcement of its rights in
this Series C Note and in any security therefor, including without limitation
reasonable fees and expenses of the Series C Lender’s counsel. If any provision
of this Series C Note is found to be invalid by a court, all the other
provisions of this Series C Note will remain in full force and effect. Each
Borrower and all other makers and indorsers of this Series C Note hereby
forever waive presentment, protest, notice of dishonor and notice of
non-payment. Each Borrower also waives all defenses based on suretyship or
impairment of collateral. This Series C Note is executed by more than one
Borrower and, therefore, the obligations of such entities hereunder are joint
and several. This Series C Note may be executed in counterparts and shall bind
each Borrower and its respective heirs, executors, administrators, successors
and assigns, and the benefits hereof shall inure to the benefit of the Series C
Lender and its successors and assigns.

 

This Series C Note has been delivered to and accepted by the Series C
Lender and will be deemed to be made in New York. THIS SERIES C NOTE WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE SERIES C LENDER AND THE
BORROWERS DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
EXCLUDING ITS CONFLICT OF LAWS RULES. 
Each Borrower hereby irrevocably consents to the jurisdiction of any
state or federal court located in New York County, City of New York, New York,
and consents that all service of process be sent by nationally recognized
overnight courier service directed to each such Borrower at each such
Borrower’s address set forth herein and service so made will be deemed to be
completed on the day of receipt by such Borrower; provided that nothing
contained in this Series C Note will prevent the Series C Lender from bringing
any action, enforcing any award or judgment or exercising any rights against
any Borrower individually, against any security or against any property of any
such Borrowers within any other county, state or other foreign or domestic
jurisdiction.  Each Borrower
acknowledges and agrees that the venue provided above is the most convenient
forum for both the Series C Lender and each such Borrower.  Each Borrower waives any objection to venue
and any objection based on a more convenient forum in any action instituted
under this Series C Note.

 

[signature page follows]

 

9

 

	
   

  	
  THERMOVIEW INDUSTRIES, INC.

  
	
   

  	
  AMERICAN HOME DEVELOPERS CO., INC.

  
	
   

  	
  FIVE STAR BUILDERS, INC.

  
	
   

  	
  KEY HOME CREDIT, INC.

  
	
   

  	
  KEY HOME MORTGAGE, INC.

  
	
   

  	
  LEINGANG SIDING AND WINDOW, INC.

  
	
   

  	
  PRIMAX WINDOW CO.

  
	
   

  	
  PRECISION WINDOW MFG., INC.

  
	
   

  	
  ROLOX, INC.

  
	
   

  	
  TD WINDOWS, INC.

  
	
   

  	
  THERMAL LINE WINDOWS, INC.

  
	
   

  	
  THERMOVIEW OF MISSOURI, INC.

  
	
   

  	
  THERMO-TILT WINDOW COMPANY

  
	
   

  	
  THOMAS CONSTRUCTION, INC.

  
	
   

  	
  THERMO-SHIELD OF AMERICA (ARIZONA), INC.

  
	
   

  	
  THERMO-SHIELD OF AMERICA (MICHIGAN), INC.

  
	
   

  	
  THERMO-SHIELD COMPANY, LLC

  
	
   

  	
  THERMO-SHIELD OF AMERICA(WISCONSIN), LLC

  
	
   

  	
  THERMOVIEW ADVERTISING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Charles L. Smith, President

  

 

10Exhibit 10.138

 

AMENDED AND RESTATED
SERIES B PROMISSORY NOTE

 

	
  $                 

  	
   

  	
  New
  York, New York

  
	
   

  	
   

  	
  March
  17, 2004

  

 

FOR VALUE RECEIVED, the undersigned FOR VALUE
RECEIVED, the undersigned [i] THERMOVIEW INDUSTRIES, INC., a Delaware
corporation (“ThermoView”), [ii] AMERICAN HOME DEVELOPERS CO., INC., a
California corporation (“American Home”), [iii] FIVE STAR BUILDERS,
INC., a California corporation (“Five Star”), [iv] KEY HOME CREDIT,
INC.,  a Delaware corporation (“Key
Home”), [v] KEY HOME MORTGAGE, INC., a Delaware corporation (“Key
Home Mortgage”), [vi] LEINGANG SIDING AND WINDOW, INC., a North Dakota
business corporation (“Leingang Siding”),  [vii] PRECISION WINDOW MFG., INC., a Missouri corporation (“Precision”),
[viii] PRIMAX WINDOW CO., a Kentucky corporation (“Primax”),
[ix] ROLOX, INC., a Kansas corporation (“Rolox”), [x] TD WINDOWS,
INC., a Kentucky corporation (“TD Windows”), [xi] THERMAL LINE
WINDOWS, INC., a North Dakota corporation (“Thermal Line”),
[xii] THERMOVIEW OF MISSOURI, INC., a Missouri corporation (“ThermoView-Missouri”),
[xiii] THERMO-TILT WINDOW COMPANY, a Delaware corporation (“Thermo-Tilt”),
[xiv] THERMO-SHIELD OF AMERICA (ARIZONA), INC., an Arizona corporation (“Thermo-Shield
Arizona”), [xv] THERMO-SHIELD OF AMERICA (MICHIGAN), INC., a Michigan
corporation (“Thermo-Shield Michigan”), [xvi] THERMO-SHIELD COMPANY,
LLC, an Illinois limited liability company (“Thermo-Shield Company”),
[xvii] THERMO-SHIELD OF AMERICA (WISCONSIN), LLC, a Wisconsin limited liability
company (“Thermo-Shield Wisconsin”), [xviii] THERMOVIEW ADVERTISING
GROUP, INC., a Delaware corporation (“ThermoView Advertising”) and [xix]
THOMAS CONSTRUCTION, INC., a Missouri corporation (“Thomas Construction”),
(ThermoView, American Home, Five Star, Key Home, Key Home Mortgage, Leingang
Siding, Precision, Primax, Rolox, TD Windows, Thermal Line,
ThermoView-Missouri, Thermo-Tilt, Thermo-Shield Arizona, Thermo-Shield
Michigan, Thermo-Shield Company, Thermo-Shield Wisconsin, ThermoView
Advertising and Thomas Construction individually are referred to in this
Agreement as a “Borrower” and collectively as the “Borrowers”)
having an address in care of ThermoView Industries, Inc., 5611 Fern Valley
Road, Louisville, Kentucky 40228, hereby promises and agrees to pay to the
order of
                           
(the “Series B Lender”), having an address of c/o Thermoview Industries,
P.O. Box 34749, Louisville, Kentucky 40228, the aggregate principal sum of
                           
DOLLARS
($                  ),
or so much thereof as may be advanced hereunder, together with interest thereon
as hereinafter provided, in lawful money of the United States of America, in
the manner set forth herein, on or before the Loan Expiration Date as that term
is defined in the Loan Agreement (as hereinafter defined).

 

1.             Other
Loan Documents. This Series B Note is issued in
connection with a Loan Agreement dated August 31, 1998, as amended, to which
the Borrowers, the Series A Lender, the Series B Lenders and the Series C
Lender (as defined therein) are parties, (the “Loan Agreement”) the
terms of which are incorporated herein by reference and other documents
executed and delivered in connection therewith (the “Loan Documents”;
terms not otherwise defined herein are used herein as therein defined in the
Loan Documents), and is secured by the property described in the Loan Documents
and by such other collateral as previously may have been or may in the future
be granted to the Series B Lender (or the Collateral Agent for the Lenders) to
secure this Series B Note.

 

1

 

2.             Rate
of Interest. 
This Series B Note will bear interest at a rate per annum (computed on
the basis of a year of 360 days and the actual number of days elapsed) equal to
ten percent (10%).

 

3.             Payment
Terms.  Principal of this
Series B Note shall be paid in monthly payments of
$               
and shall be payable on the last day of each calendar month commencing on
November 30, 2004.  The balance of the
principal shall be paid in a single payment on the Loan Expiration Date.

 

Interest on this Series B Note
shall be payable on the last day of each calendar month and on any and each
date that the principal of this Series B Note is paid in full, and on the Loan
Expiration Date.  Notwithstanding
anything else herein to the contrary, (i) during the period commencing on
December 1, 2003 and through and including September 30, 2004 (the “PIK
Period”) any interest not paid by the Borrowers in cash on the date such
interest is due shall be paid-in-kind and added to the principal amount
outstanding under this Series B Note on the date such interest shall be payable
only in cash pursuant to the terms of this Series B Note and (ii) from October
1, 2004 and thereafter any and all interest shall be payable only in cash.  All increased principal amounts outstanding
under this Series B Note as a result of the foregoing sentence shall bear
interest from the date of such increase at the interest rate provided for herein.  The Borrowers hereby acknowledge and agree
that the paid-in-kind interest which has accrued during the PIK Period prior to
the date hereof is not reflected in the stated principal amount of this Series
B Note indicated in the introductory paragraph or otherwise herein.

 

If any payment under this
Series B Note shall become due on a Saturday, Sunday or public holiday under
the laws of the State where the Series B Lender’s office indicated above is
located, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in computing interest in connection
with such payment. The Borrowers hereby authorize the Series B Lender to charge
any Borrower’s deposit account at the Series B Lender for any payment when due
hereunder. Payments received will be applied to charges, fees and expenses
(including attorneys’ fees), accrued interest and principal in any order the
Series B Lender may choose, in its sole discretion.  “Business Day” shall mean any day other than a Saturday or
Sunday or a legal holiday on which banks are authorized or required to be
closed for business in New York, New York.

 

4.             Late
Payments; Default Rate. 
If the Borrowers fail to make any payment of principal, interest or
other amount coming due pursuant to the provisions of this Series B Note within
ten (10) calendar days of the date due and payable, the Borrowers also shall
pay to the Series B Lender a late charge equal to the lesser of two percent
(2%) of the amount of such payment or $25.00. Such ten day period shall not be
construed in any way to extend the due date of any such payment. The late
charge is imposed for the purpose of defraying the Series B Lender’s expenses
incident to the handling of delinquent payments and is in addition to, and not
in lieu of, the exercise by the Series B Lender of any rights and remedies
hereunder, under the other Loan Documents or under applicable laws, and any
fees and expenses of any agents or attorneys which the Series B Lender may
employ. Upon maturity, whether by acceleration, demand or otherwise, and at the
option of the Series B Lender upon the occurrence of any Event of Default (as
hereinafter defined) and during the continuance thereof, this Series B Note
shall bear interest at a rate per annum (based on a year of 360 days and actual
days elapsed) which shall be two percentage points (2%) in excess of the
interest rate in effect

 

2

 

from time to time
under this Series B Note but not more than the maximum rate allowed by law (the
“Default Rate”). The Default Rate shall continue to apply whether or not
judgment shall be entered on this Series B Note.

 

5.             Prepayment.  Principal of this Series B Note may be
repaid or prepaid in whole or in part without penalty or premium at any time,
but only in the amount of $10,000.00, or integral multiples thereof, or
an amount equal to the entire unpaid principal balance of this Series B Note,
and only provided Borrowers have given to the Series B Lenders not less
than three (3) Business Days prior written notice of such prepayment.  On July 31 and November 15 of each calendar
year, the Borrowers shall prepay this Series B Note in an amount outstanding
equal to 100% of the Borrowers’ cash, cash equivalents and marketable securities
balance on its balance sheet which, collectively, is in excess of $1,000,000 as
of June 30 or October 15, as applicable, of that year.  Upon termination of that certain Amended and
Restated Reimbursement Agreement dated as of March 17, 2004 among GE Capital
Equity Investments, Inc. and the Borrowers (the “Reimbursement Agreement”)
and fulfillment by the Borrowers of all of their obligations thereunder, any
remaining balance in the Cash Account (as defined in the Reimbursement
Agreement) shall be used to prepay this Series B Note.  Subject to the provisions of Section 8
hereof, any prepayment of this Series B Note and any prepayments in respect of
the second and third sentences of this Section 5 shall be applied in the
following order: (i) then due and payable fees and expenses; (ii) then due and
payable interest and principal payments on the Reimbursement Obligations; (iii)
then due and payable interest payments on the Series A Note, the Series B Notes
and the Series C Note on a pro  rata basis; (ivi) principal
payments on the Series A Note and the Series B Notes on a pro  rata
basis; and (iv) principal payments on the Series C Note.  Any repayments or optional prepayments of
this Series B Note at maturity, including in connection with a sale or merger
of any Borrower or a sale of all or substantially all of the assets of any
Borrower, shall be applied in the following order: (i) then due and payable
fees and expenses; (ii) then due and payable interest and principal payments on
the Reimbursement Obligations; (iii) then due and payable interest payments on
the Series A Note, the Series B Notes and the Series C Note on a pro  rata
basis; (iv) principal payments on the Series A Note; (v) principal payments on
the Series B Notes; and (vi) principal payments on the Series C Note.

 

6.             Events
of Default. 
The occurrence of any of the following events will be deemed to be an “Event
of Default” under this Series B Note: (i) the nonpayment of any principal,
interest or other indebtedness under this Series B Note or the Loan Agreement
when due; (ii) the occurrence of any event of default or default and the lapse
of any notice or cure period under any Loan Document, including but not limited
to the Series A Notes and the Series C Note, or any other debt, liability or
obligation to the Series B Lender of any Obligor; (iii) the filing by or
against any Obligor of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against any Obligor, such proceeding is
not dismissed or stayed within 30 days of the commencement thereof); (iv) any
assignment by any Obligor for the benefit of creditors, or any levy,
garnishment attachment or similar proceeding is instituted against any property
or any Obligor held by or deposited with the Series B Lender; (v) a default
with respect to any other indebtedness of any Obligor for borrowed money, if
the effect of such default is to cause or permit the acceleration of such debt;
(vi) the commencement of any foreclosure or forfeiture proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to

 

3

 

the Series A, B or
C Lenders; (vii) the entry of a final judgment against any Obligor in excess of
$100,000, which judgment has not been stayed, discharged or appealed within ten
(10) Business Days of the date of entry thereof, (viii) the Borrower ceases
doing business as a going concern; (ix) the revocation or attempted revocation,
in whole or in part, of any guarantee for the benefit of the Series B Lender by
any Guarantor; (x) any representation or warranty made by any Obligor to the
Series B Lender in any Loan Document, or any other documents now or in the
future securing the obligations of any Obligor to the Series B Lender, is
false, erroneous or misleading in any material respect; (xi) the failure by
Thermoview to perform or observe the financial covenant contained in Section
4.I of the Loan Agreement; or (xii) the occurrence of any Event of Default (as
defined in any Loan Documents or any other documents now or in the future
securing the obligations of any Obligor to the Series A, B or C Lenders) or any
default under any of the Loan Documents or such other documents that does not
have a defined set of “Events of Default”  and the lapse of any
notice or cure period provided in the Loan Documents or such other documents
with respect to such default. As used herein, the term “Obligor” means
any Borrower and any Guarantor, and the term “Guarantor” means any
guarantor of the obligations of any Borrower to the Series B Lender existing on
the date of this Series B Note or arising in the future.

 

Upon the occurrence and during the
continuance of an Event of Default: (a) if an Event of Default specified in
clauses (iii) or (iv) above shall occur, the outstanding principal balance and
accrued interest hereunder together with any additional amounts payable
hereunder shall be immediately due and payable without demand or notice of any
kind; (b) if an Event of Default specified in clauses (i), (vii) or (xi) above,
or Section 6.E. or 6.F. of the Loan Agreement, or an Event of Default resulting
from a breach of Section 5.G. of the Loan Agreement, shall occur, the
outstanding principal balance and accrued interest hereunder together with any
additional amounts payable hereunder, at the option of the Requisite A Lenders
or, if the Series A Note shall no longer be outstanding, the Requisite Lenders,
and without demand or notice of any kind, may be accelerated and become
immediately due and payable; (c) if an Event of Default specified in clause (v)
shall occur in connection with the obligations under that certain Securities
Purchase Agreement, dated as of July 8, 1999, between the Series A Lender and
Thermoview, as amended from time to time, shall be accelerated as a result of a
default thereunder pursuant to Sections 5.1(h) or 7.1(a) thereof, at the option
of the Requisite A Lenders or, if the Series A Note shall no longer be
outstanding, the Requisite C Lender, and without demand or notice of any kind,
may be accelerated and become immediately due and payable; (d) if any other
Event of Default shall occur and the same shall continue unremedied for a
period of 30 days thereafter, the outstanding principal balance and accrued
interest hereunder together with any additional amounts payable hereunder, at
the option of the Requisite Lenders and without demand or notice of any kind,
may be accelerated and become immediately due and payable; (e) at the option of
the Requisite Lenders will bear interest at the Default Rate from the date of
the occurrence of the Event of Default; and (f) the Series B Lender may
exercise from time to time any of the rights and remedies available to the
Series B Lender under the Loan Documents or under applicable law.

 

Notwithstanding anything contained in this
Section 6, upon the filing of a bankruptcy of Thermoview, whether voluntary or
involuntary, the Series A Lender shall have the right to file a proof of claim
on the Series B Lenders’ behalf in respect of the Series B Note.

 

4

 

7.             Right
of Setoff. 
In addition to all liens upon and rights of setoff against the money,
securities or other property of each Borrower given to the Series B Lender by
law, the Series B Lender shall have, with respect to any Borrower’s obligations
to the Series B Lender under this Series B Note and to the extent permitted by
law, a contractual possessory security interest in and a contractual right of
setoff against, and each Borrower hereby assigns, conveys, delivers, pledges
and transfers to the Series B Lender all of each Borrower’s right, title and
interest in and to, all deposits, moneys, securities and other property of such
Borrower now or hereafter in the possession of or on deposit with, or in
transit to, the Series B Lender whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, all IRA, Keogh, employee withholding
accounts, and trust accounts. Every such security interest and right of setoff
may be exercised without demand upon or notice to any Borrower. Every such
right of setoff shall be deemed to have been exercised immediately upon the
occurrence of an Event of Default hereunder without any action of the Series B
Lender, although the Series B Lender may enter such setoff on its books and
records at a later time.

 

8.             Subordination,
Priority and Payment Over Of Proceeds In Certain Events.

 

9.             The
Borrowers and the Lenders and any other holder of a Note (the Lenders and such
holders being hereinafter referred to collectively as “Holders”)
covenant and agree that all payments of the principal of and interest in
respect of the Series A Note, the Series B Notes and the Series C Note shall be
subordinated in accordance with the provisions of this Section 8 to the
prior payment in full of the Senior Debt. 
For purposes of this Section 8, (x) the term “Senior Debt” shall
mean, (i) with respect to the Series A Note, the Reimbursement Obligations,
(ii) with respect to the Series B Notes, the Reimbursement Obligations and the
Series A Note and (iii) with respect to the Series C Note, the Reimbursement
Obligations, the Series A Note and the Series B Notes, and each of clauses
(i),(ii) and (iii) above shall include principal of and premium, if any, and
interest (including interest accruing at the rate (including at the default
rate) provided for hereunder after the commencement of (A) any bankruptcy
proceedings involving any Borrower or (B) proceedings involving any Borrower of
the type referred to in clause (b) hereof, in each case, whether or not
allowed as a claim against any Borrower in any such proceeding) on all loans
and other extensions of credit under, and all expenses, fees, reimbursements,
indemnities and other amounts owing pursuant to the Senior Debt, to the extent
permitted to be incurred pursuant to the Loan Documents , and (y) the term “Subordinated
Debt” shall mean, (i) with respect to the Reimbursement Obligations, the
Series A Note, the Series B Notes and the Series C Note, (ii) with respect to
the Series A Note, the Series B Notes and the Series C Note and (iii) with
respect to the Series B Notes, the Series C Note.  The Borrowers and the Lenders further covenant and agree that all
payments in respect of this Series B Note shall be subordinated in accordance
with the provisions of this Section 8.

 

10.           Upon
payment or distribution of assets or securities of the Borrowers of any kind or
character, whether in cash, property or securities, upon any dissolution or
winding up or total or partial liquidation or reorganization of the Borrowers,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings or upon an assignment for the benefit of creditors or any
other marshalling of the

 

5

 

assets and
liabilities of the Borrowers, the Senior Debt shall first be paid in full in
cash, or payment provided for in cash or cash equivalents in a manner
satisfactory to the Holder thereof, before any direct or indirect payments or
distributions, including, without limitation, by exercise of set-off, of any
cash, property or securities on account of principal of (or premium, if any) or
interest on the Subordinated Debt, and to that end the Senior Debt Holder shall
be entitled to receive directly, for application to the payment thereof (to the
extent necessary to pay the Senior Debt in full after giving effect to any
substantially concurrent payment or distribution to or provision for payment to
the Senior Debt Holder in respect of the Senior Debt), any payment or
distribution of any kind or character, whether in cash, property or securities,
in respect of the Subordinated Debt. 
The provisions of this Section shall not be applicable to payments made
in accordance with the terms of this Series B Note and received prior to the
commencement of any such dissolution or winding up or total or partial
liquidation or reorganization of the Borrowers, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
upon an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Borrowers.

 

11.           No
direct or indirect payment by or on behalf of the Borrowers of principal of
(premium, if any), or interest on, the Subordinated Debt, whether pursuant to
the terms of Subordinated Debt, upon acceleration or otherwise, shall be made
if at the time of such payment there exists (i) a default in the payment of all
or any portion of principal of (premium, if any), interest on, fees or other
amounts owing in connection with any Senior Debt or (ii) any default other than
a default described in clause (i) above under any document or instrument
governing or evidencing any Senior Debt, and, in either case, such default
shall not have been cured or waived in writing.

 

12.           All
amounts paid to the Series B Lenders pursuant to the terms of this Series B
Note shall be distributed to each of the Series B Lenders on a pro  rata
basis.

 

13.           Rights
and Obligations of Holders.

 

(g)           In the event that,
notwithstanding anything contained in Section 8 prohibiting such payment or
distribution, the Holders shall have received any payment on account of the
Subordinated Debt at a time when such payment is prohibited by such provision
before the Senior Debt is paid in full, then and in such event, such payment or
distribution shall be received and held in trust by the Holders apart from
their other assets and paid over or delivered to the holders of the Senior Debt
remaining unpaid to the extent necessary to pay in full in cash the principal
of (premium, if any), and interest on, such Senior Debt in accordance with its
terms and after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt.

 

(h)           Nothing contained
in this Section 9 will limit the right of the Holders of Subordinated Debt to
take any action to accelerate the maturity of the Subordinated Debt pursuant to
Section 6 hereof, provided, however, that all Senior Debt then
due or thereafter declared to be due shall first be paid in full before the
Holders are entitled to receive any payment from any Borrowers of principal of,
or interest on, the Note.

 

6

 

(i)            Upon any payment or
distribution of assets or securities referred to in this Section 9, the
Holders shall be entitled to rely upon any order or decree of a court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, and upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making any
such payment or distribution, delivered to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of Senior Debt and other Indebtedness of the Borrowers, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Section 9.

 

14.           Rights
of Holders of Senior Debt Not To Be Impaired.

 

15.           No
right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act by any such holder, or by any
noncompliance by the Borrowers with the terms and provisions and covenants
herein regardless of any knowledge thereof such holder may have or otherwise be
charged with.

 

16.           The
provisions of these Sections 8-15 are intended to be for the benefit of,
and shall be enforceable directly by, the holders of the Senior Debt.  The Borrowers and each Holder of any Note,
by its acceptance thereof, acknowledges that the holders of the Senior Debt are
relying upon the provisions of these Sections 8-15 in extending such
Senior Debt.

 

17.           Subrogation.

 

18.           Upon
the payment in full of all Senior Debt, the Holders shall be subrogated to the
extent of the payments or distributions made to the holders of, or otherwise
applied to payment of, the Senior Debt pursuant to the provisions of these Sections
8-15 and to the rights of the holders of Senior Debt to receive payments or
distributions of assets of the Borrowers made on the Senior Debt until this
Series B Note shall be paid in full; and for the purposes of such subrogation,
no payments or distributions to holders of Senior Debt of any cash, property or
securities to which Holders of this Series B Note would be entitled except for
the provisions of these Sections 8-15 and no payment over pursuant to
the provisions of these Sections 8-15 to holders of Senior Debt by the
Holders, shall, as between the Borrowers, its creditors other than holders of
Senior Debt and the Holders, be deemed to be payment by the Borrowers to or on
account of Senior Debt, it being understood that the provisions of these Sections
8-15 are solely for the purpose of defining the relative rights of the
holders of Senior Debt, on the one hand, and the Holders, on the other hand.

 

19.           If any
payment or distribution to which the Holders would otherwise have been entitled
but for the provisions of these Sections 8-15 shall have been applied,
pursuant to the provisions of these Sections 8-15, to the payment of
Senior Debt, then and in such case, the Holders shall be entitled to receive
from the holders of Senior Debt at the time outstanding any payments or
distributions received by such holders of Senior Debt in excess of the amount
sufficient to pay all Senior Debt in full.

 

20.           Obligations
of Borrowers Unconditional.

 

7

 

21.           Nothing
contained in these Sections 8-15 or elsewhere in the Loan Documents or
in this Series B Note is intended to or shall impair, as between the Borrowers
and the Holders, the obligations of the Borrowers, which are absolute and
unconditional, to pay to the Holders the principal of (premium, if any), and
interest on, this Series B Note as and when the same shall become due and
payable in accordance with its terms, or is intended to or shall affect the
relative rights of the Holders and creditors of the Borrowers other than the
holders of the Senior Debt, nor shall anything herein or therein prevent any
Holder from exercising all remedies otherwise permitted by applicable law upon
the occurrence of an Event of Default under the Loan Documents or under this
Series B Note, subject to the rights, if any, under these Sections 8-15
of the holders of Senior Debt in respect of cash, property or securities of the
Borrowers received upon the exercise of any such remedy.

 

22.           The
failure to make a payment on account of principal of, or interest on, this
Series B Note by reason of any provision of these Sections 8-15 shall
not be construed as preventing the occurrence of an Event of Default hereunder.

 

23.           Notice
to Holders. 
Each Borrowers shall give prompt written notice to each Holder of any
fact known to such Borrower which would prohibit the making of any payment on
or in respect of this Series B Note, but failure to give such notice shall not
affect the subordination of the Subordinated Debt to the Senior Debt provided
in Section 8. 
Notwithstanding the provisions of these Sections 8-15 or any
other provision of the Loan Documents or this Series B Note, no Holder shall be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or in respect hereof, unless and until the Holders
shall have received written notice thereof from a Borrower or a representative
of or holder of Senior Debt, and, prior to the receipt of any such written
notice, subject to the provisions of these Sections 8-15 the Holders
shall be entitled in all respects to assume no such facts exist.  Nothing contained in this Section 13
shall limit the right of the holders of Senior Debt to recover payments as
contemplated by Sections 8 and 9.

 

24.           Right
of Any Holder as Holder of Senior Debt.  Any Holder in its individual capacity shall
be entitled to all the rights set forth in these Sections 8-15 with
respect to any Senior Debt which may at any time be held by it, to the same
extent as any other holder of Senior Debt, and nothing in this agreement shall
deprive such Holder of any of its rights as such holder.

 

25.           Reinstatement.  The provisions of these Sections 8-15
shall continue to be effective or be reinstated, and the Senior Debt shall not
be deemed to be paid in full, as the case may be, if at any time any payment of
any of the Senior Debt is rescinded or must otherwise be returned by the holder
thereof upon the insolvency, bankruptcy or reorganization of the Borrowers or
otherwise, all as though such payment had not been made.

 

26.           No
Novation. 
This Amended and Restated Series B Note does not constitute a novation
or waiver of the obligations and liabilities existing under that certain
Amended and Restated Series B Note dated as of June 30, 2003 (the “Existing
Series B Note”) and issued by the Borrowers, including any obligation or
action required to be performed prior to the date hereof or to evidence payment
of all or any of such obligations and liabilities.  The Borrowers hereby agree that this Series B Note amends and

 

8

 

restates in its
entirety the Existing Series B Note and that from and after the date hereof,
the Existing Series B Note shall be of no further force or effect except as to
evidence the incurrence of the obligations of the Borrowers thereunder and the
representations and warranties made thereunder.   The Borrowers further agree that (a) all of the obligations of
the Borrowers under the Existing Series B Note are in all respects continuing
(as amended hereby), with the terms thereof being modified to the extent
provided herein; and (b) the liens and security interests as granted under the
Security Documents securing payment of such obligations are in all respects
continuing and in full force and effect and secure the payment of such
obligations.

 

27.           Miscellaneous.  No delay or omission of the Series B Lender
to exercise any right or power arising hereunder shall impair any such right or
power or be considered to be a waiver of any such right or power, nor shall the
Series B Lender’s action or inaction impair any such right or power. Each
Borrower agrees to pay on demand, to the extent permitted by law, all costs and
expenses incurred by the Series B Lender in the enforcement of its rights in
this Series B Note and in any security therefor, including without limitation
reasonable fees and expenses of the Series B Lender’s counsel. If any provision
of this Series B Note is found to be invalid by a court, all the other
provisions of this Series B Note will remain in full force and effect. Each
Borrower and all other makers and indorsers of this Series B Note hereby
forever waive presentment, protest, notice of dishonor and notice of non-payment.
Each Borrower also waives all defenses based on suretyship or impairment of
collateral. This Series B Note is executed by more than one Borrower and,
therefore, the obligations of such entities hereunder are joint and several.
This Series B Note may be executed in counterparts and shall bind each Borrower
and its respective heirs, executors, administrators, successors and assigns,
and the benefits hereof shall inure to the benefit of the Series B Lender and
its successors and assigns.

 

This Series B Note has been delivered to and
accepted by the Series B Lender and will be deemed to be made in New York. THIS
SERIES B NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE SERIES
B LENDER AND THE BORROWERS DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, EXCLUDING ITS CONFLICT OF LAWS RULES.  Each Borrower hereby irrevocably consents to the jurisdiction of
any state or federal court located in New York County, City of New York, New
York, and consents that all service of process be sent by nationally recognized
overnight courier service directed to each such Borrower at each such
Borrower’s address set forth herein and service so made will be deemed to be
completed on the day of receipt by such Borrower; provided that nothing contained
in this Series B Note will prevent the Series B Lenders from bringing any
action, enforcing any award or judgment or exercising any rights against any
Borrower individually, against any security or against any property of any such
Borrowers within any other county, state or other foreign or domestic
jurisdiction.  Each Borrower
acknowledges and agrees that the venue provided above is the most convenient
forum for both the Series B Lenders and each such Borrower.  Each Borrower waives any objection to venue
and any objection based on a more convenient forum in any action instituted
under this Series B Note.

[signature page follows]

 

9

 

	
   

  	
  THERMOVIEW INDUSTRIES, INC.

  
	
   

  	
  AMERICAN HOME DEVELOPERS CO., INC.

  
	
   

  	
  FIVE STAR BUILDERS, INC.

  
	
   

  	
  KEY HOME CREDIT, INC.

  
	
   

  	
  KEY HOME MORTGAGE, INC.

  
	
   

  	
  LEINGANG SIDING AND WINDOW, INC.

  
	
   

  	
  PRIMAX WINDOW CO.

  
	
   

  	
  PRECISION WINDOW MFG., INC.

  
	
   

  	
  ROLOX, INC.

  
	
   

  	
  TD WINDOWS, INC.

  
	
   

  	
  THERMAL LINE WINDOWS, INC.

  
	
   

  	
  THERMOVIEW OF MISSOURI, INC.

  
	
   

  	
  THERMO–TILT WINDOW COMPANY

  
	
   

  	
  THOMAS CONSTRUCTION, INC.

  
	
   

  	
  THERMO–SHIELD OF AMERICA (ARIZONA), INC.

  
	
   

  	
  THERMO–SHIELD OF AMERICA (MICHIGAN), INC.

  
	
   

  	
  THERMO–SHIELD COMPANY, LLC

  
	
   

  	
  THERMO–SHIELD OF AMERICA(WISCONSIN), LLC

  
	
   

  	
  THERMOVIEW ADVERTISING GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Charles L. Smith, President

  	
   

  

 

10

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