Exhibit 10.2
------------
GSV, INC.
PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND LAWS.
As of November 30, 2005
FOR VALUE RECEIVED, GSV, INC., a Delaware corporation ("Company"), with its
principal office at 191 Post Road West, Westport, Connecticut 06880, hereby
promises to pay to the order of 116 Newark Avenue Corporation, a New Jersey
corporation ("Holder"), with its principal office at 30 Montgomery Street,
Jersey City, New Jersey 07302 (the "Holder's Office"), or its assigns, on
November 29, 2007 (the "Maturity Date"), the principal amount of Three Hundred
Fifty-Six Thousand Two Hundred Forty-Nine Dollars and Four Cents ($356,249.04)
(the "Principal Amount"), in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public or private debts, together with interest on the unpaid balance of said
Principal Amount from time to time outstanding at the rate of seven percent (7%)
per annum ("Interest"). The unpaid Principal Amount, together with the then
accrued unpaid Interest and all other amounts owed hereunder, shall be due and
payable on the Maturity Date. Payment of the Principal Amount and Interest
hereunder shall be made by certified check to the Holder at the Holder's office
or wire transfer of immediately available good funds to such bank account as the
Holder may designate by notice to the Company prior to any such payment.
This Note is subject to prepayment in whole or in part at any time and from
time to time without penalty or premium, but with Interest on the amount prepaid
to the date of prepayment. All prepayments will first be applied to the
repayment of accrued fees and expenses, then to Interest accrued on this Note
through the date of such prepayment until all then outstanding accrued Interest
has been paid, and then shall be applied to the repayment of the Principal
Amount.
1. Default.
1.1 Events of Default. Upon the occurrence of any of the following
events (herein "Events of Default"):
(i) The Company shall fail to pay the Principal Amount and Interest on
the Maturity Date;
(ii) if this Note or any Collateral Document (as hereinafter defined)
shall cease to be enforceable in accordance with its terms;
(ii) (A) The Company shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement,
readjustment of its debts, receivership, dissolution, liquidation,
winding-up, composition or any other relief under any bankruptcy
law, or under any other insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or any other
similar act or law, of any jurisdiction, domestic or foreign, now or
hereafter existing; or (B) the Company or any Subsidiary shall admit the
material allegations of any petition or pleading in connection with any
such proceeding; or (C) the Company or any Subsidiary shall apply for, or
consent or acquiesce to, the appointment of a receiver, conservator,
trustee or similar officer for it or for all or a substantial part of its
property or admit generally an inability to pay its debts as they become
due; or (D) the Company or any Subsidiary shall make a general assignment
for the benefit of creditors;
(iii) (A) The commencement of any proceedings or the taking of any
other action against the Company in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts, liquidation, dissolution,
arrangement, composition, or any other relief under any bankruptcy law or
any other similar act or law of any jurisdiction, domestic or foreign, now
or hereafter existing and the continuance of any of such event for thirty
(30) days undismissed, unbonded or undischarged; or (B) the appointment of
a receiver, conservator, trustee or similar officer for the Company for any
of its property and the continuance of any of such event for thirty (30)
days undismissed, unbonded or undischarged; or (C) the issuance of a
warrant of attachment, execution or similar process against any of the
property of the Company and the continuance of such event for thirty (30)
days undismissed, unbonded and undischarged;
(iv) Any of the Company's representations or warranties contained
herein or in the Termination, Settlement and Release Agreement dated as of
the date hereof (the "Termination Agreement") between the Company and the
Holder, or any representation or warranty contained in any Collateral
Document, is false or misleading in any material respect; or
(v) The Company shall breach or fail to perform or observe any
obligation, covenant, term, condition, provision or agreement of the
Company contained in this Note or the Termination Agreement, or any
Collateral Document, after giving effect to any applicable notice
provisions and cure periods; provided, however, that with respect to a
failure to comply with any of the provisions of Sections 2.2(a) and (c) of
this Note, such failure is not remedied within twenty (20) days after the
earlier of Company's receipt of written notice of same or the Company's
becoming aware of such failure;
then, and in any such event, the Holder, at its option and without written
notice to the Company, may declare the entire Principal Amount of this Note then
outstanding together with any accrued Interest thereon immediately due and
payable, and the same shall forthwith become immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, and exercise any and all other legal or equitable rights
resulting therefrom. The Events of Default listed herein are solely for the
purpose of protecting the interests of the Holder of this Note.
1.2 Enforcement; Non-Waiver and Other Remedies. (a) In the case any one
or more Events of Default shall have occurred, the Holder may proceed to protect
and enforce its rights, either by suit in equity and/or by action at law,
whether for the specific performance of any covenant or agreement contained in
this Note, or any Collateral Document, or to enforce any other legal or
equitable right thereof, or, upon accelerating the required payment of the
Principal Amount
-2-
of this Note and accrued Interest thereon as provided herein, may proceed to
enforce the payment of all sums due upon this Note. In the event an Event of
Default shall have occurred and the Holder of this Note shall employ attorneys,
or incur other costs and expenses for the collection of payments due or to
become due, or for the enforcement or performance or observance of any
obligation or agreement of the Company under this Note, or any Collateral
Document, the Company agrees that it will pay to the Holder, on demand, the
reasonable fees of such attorney together with all other costs and expense
incurred by Holder.
(b) No course of dealing, delay or omission on the part of the Holder of
this Note in exercising any right hereunder shall operate as a waiver or
otherwise prejudice the right of the Holder of this Note. Holder shall not be
deemed to have waived any of its rights under this Note unless such waiver is in
writing and signed by Holder. A waiver in writing by Holder on one occasion
shall not be construed as a consent to or a waiver of any right or remedy on any
future occasion. No remedy conferred hereby shall be exclusive of any other
remedy referred to herein or now or hereafter available at law, in equity, by
statute or otherwise.
2. Obligation to Pay Principal and Interest; Covenants. No provision of
this Note shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the Principal Amount of and Interest on this Note at
the place, at the respective times, at the rates, and in the currency or
securities herein prescribed.
2.1 Usury. In no event shall the amount or rate of interest due and
payable under this Note exceed the maximum amount or rate of interest allowed by
applicable law and, in the event any such excess payment is made by Company or
received by Holder, such excess sum shall be credited as a payment of Principal
Amount (or if no Principal Amount remains outstanding, shall be refunded to the
Company). It is the express intent hereof that the Company shall not pay and
Holder not receive, directly or indirectly or in any other manner, interest in
excess of that which may be lawfully paid under applicable law. All Interest
(including all charges, fees or other amounts deemed to be Interest) that is
paid or charged under this Note shall, to the maximum extent permitted by
applicable law, be amortized, allocated and spread on a pro rata basis
throughout the actual term of this Note.
2.2 Covenants. The Company covenants and agrees that, while this Note
is outstanding, it shall:
(a) Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon any
properties belonging to it before the same shall be in default; provided,
however, that the Company shall not be required to pay any such tax, assessment,
charge or levy that is being contested in good faith by proper proceedings and
adequate reserves for the accrual of same are maintained if required by
generally accepted accounting principles;
(b) Preserve its corporate existence and continue to engage in
business of the same general type as conducted as of the date hereof; and
(c) Comply in all respects with all statutes, laws, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations and requirements ("Requirement(s)") of all governmental bodies,
departments, commissions, boards, companies or associations insuring the
premises, courts, authorities, officials, or officers, that are applicable to
the
-3-
Company; except when the failure to comply would not have a material adverse
effect on the Company; provided that nothing contained herein shall prevent the
Company from contesting in good faith the validity or the application of any
Requirements.
2.3 Consolidation, Merger or Disposition of Assets. Without limiting
any provision of Section 2.2(b) hereof, the Company shall not consolidate with,
merge into, or sell or otherwise dispose of all or substantially all its
properties as an entirety to, any person or entity unless such successor
corporation shall expressly assume the due and punctual payment of the principal
of and interest on this Note according to its tenor, and the due and punctual
performance and observance of all the covenants, agreements and conditions of
this Note to be performed or observed by the Company to the same extent as if
such successor corporation had been the original maker of this Note (and such
assumption shall, upon the request of the Holder of this Note, be evidenced by
the endorsing of an appropriate legend upon this Note, and any Note executed
pursuant to Section 3.2 hereof after such assumption shall, unless executed in
the name of such corporation, have a similar legend endorsed thereon).
3. Miscellaneous.
3.1 Required Consent. The Company may not modify any of the terms of
this Note without the prior written consent of the Holder.
3.2 Lost Documents. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and upon surrender and cancellation of such Note, if
mutilated, the Company will make and deliver in lieu of such Note a new Note of
like tenor and unpaid principal amount and dated as of the original date of the
Note.
3.3 Benefit. This Note shall be binding upon and inure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
3.4 Notices and Addresses. All notices, offers, acceptances and any
other acts under this Note (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressee in person, by overnight courier
service or similar receipted delivery, or, if mailed, postage prepaid, by
certified mail, return receipt requested, as follows:
To the Holder: To the Holder's address on page 1 of this Note,
Attn.: Frank J. Guarini
With a copy to: McCarter & English, LLP
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attn: Howard Kailes, Esq.
To the Company: To the Company's address on page 1 of this Note,
Attn: Gilad Gat, President
-4-
With a copy to: Davis & Gilbert LLP
1740 Broadway
New York, New York 10019
Attn: Ralph W. Norton, Esq.
or to such other address as any party, by notice to the other parties, may
designate from time to time. Time shall be counted to, or from, as the case may
be, the delivery in person or five business days after mailing.
3.5 Governing Law. This Note will be deemed to have been made and
delivered in New Jersey and will be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New Jersey, without giving effect to the choice or conflict of law principles
thereof.
3.6 Section Headings. Section headings herein have been inserted
for reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Note.
3.7 Interpretation. Whenever possible, each provision of this Note shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note.
3.8 Assignment. All rights of Holder under this Note may be assigned
by Holder to any third party and all rights of Holder hereunder shall inure to
the benefit of its transferees, successors and assigns.
3.9 Collateral Documents. This Note is guaranteed pursuant to a
certain Guaranty dated the date hereof executed to the Holder, and its
successors and assigns, by Polystick U.S. Corporation, which in turn is secured
by the provisions of a certain Pledge Agreement dated the date hereof executed
to the Holder and it successors and assigns by said guarantor, and is entitled
to the benefits thereof. The foregoing Guaranty Agreement and Pledge Agreement
are herein referred to as the "Collateral Documents".
3.10 SUBMISSION TO JURISDICTION. THE COMPANY HEREBY IRREVOCABLY SUBMITS
AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS
LOCATED WITHIN THE STATE OF NEW JERSEY, AND IRREVOCABLY AGREES THAT ALL ACTIONS
OR PROCEEDINGS RELATED TO THIS NOTE MAY BE LITIGATED IN SUCH COURTS, AND
UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON IMPROPER VENUE
OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY DELIVERY TO THE MAKER AS SET FORTH IN SECTION
8.11 HEREOF. NOTHING CONTAINED IN THIS SECTION 3.10 SHALL AFFECT THE RIGHT OF
THE HOLDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
ENFORCE A JUDGMENT OBTAINED IN THE COURTS OF ANY OTHER JURISDICTION.
-5-
3.11 JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE MAKER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION BROUGHT ON
THIS NOTE.
IN WITNESS WHEREOF, this Note has been executed and delivered on the
date specified above by the duly authorized representatives of the Company and
the Holder.
GSV, INC.
By: /s/ Gilad Gat
-------------
Name: Gilad Gat
Title: President
Accepted and Agreed:
116 NEWARK AVENUE CORPORATION
By: /s/ Carol Maurer
-------------------------
Name: Carol Maurer
Title: President
-6-