EXHIBIT 10.9
NOTE: Fill in all blanks before signing. If a particular provision is not
desired or has no applicability, delete the provision or, if it contains
a blank space, insert "N/A" or the words "Not Applicable" in such space.
All deletions should be initialled by the Borrower and the Bank.
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[LOGO]Bank Leumi INSTALLMENT PROMISSORY NOTE
Trust Company of New York
MEMBER FDIC
New York. N.Y.
June 29, 1994
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$ 800,000.00
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A. GENERAL; TERMS OF PAYMENT
1. FOR VALUE RECEIVED, the undersigned, Computer Generated Solutions, Inc.
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(Exact Name of Borrower)
a Corporation (1) organized under the laws of the State of
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Delaware (the "Borrower"), hereby promises to pay to the order of BANK
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LEUMI TRUST COMPANY OF NEW YORK (the "Bank"), at its office at 535 Seventh
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(Address of Branch Office)
Avenue, New York, N.Y. 10018 the principal sum of Eight Hundred Thousand and
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(Write Out Principal Sum)
00/100 Dollars ($ 800,000.00 ):
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[x] in Thirty-six ( 36 ) consecutive Monthly (2) installments;
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the first Thirty-five ( 35 ) installments of which shall each be in the
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amount of $ 22,222.22 and the last installment of which shall be in the
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amount of $ 22,223.30 , payable on the last day of each month (3) in
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each year, commencing July , 1994 ; (or)
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[ ] in ( ) installments, to be paid on the dates and in
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the amounts set forth in the following schedule:
Date Principal
Payment Due Amount of Payment
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The Borrower will pay interest on the unpaid principal amount hereof from time
to time outstanding, computed on the basis of a 360-day year (the charging of
interest on the basis of a 360-day year results in the payment of more interest
than would be required if interest were charged on the basis of the actual
number of days in the year), at a rate per annum which shall be equal to
[ ] % per annum; or
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[x] 1 1/4 % per annum above the rate of interest designated by the Bank,
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and in effect from time to time, as its "Reference Rate", adjusted
when said Reference Rate changes. (The Borrower acknowledges that the
Reference Rate may not necessarily represent the lowest rate of
interest charged by the Bank to customers.)
The Borrower will pay interest, at the rate described above, monthly on the last
day of each month in each year, commencing June , 19 94 , at maturity
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(whether by acceleration or otherwise) and upon the making of any prepayment, as
hereinafter provided. In addition, the Borrower will pay interest on any overdue
installment of principal for the period for which overdue, on demand, at a rate
equal to 3% per annum above the rate of interest hereinabove indicated.
In no event shall interest exceed the maximum legal rate permitted by law.
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(1) Insert the word "corporation" or "partnership," as applicable, or strike the
phrase if Borrower is an individual.
(2) Insert the word "monthly," "quarter-annual" or "semi-annual," as
applicable.
(3) Insert the word "month" if installments are payable monthly or, if the
installments are payable quarterly or semi-annually, the names of the
months in each quarter or 6-month period in which payable.
Form No. 640 (R10/86)
2. All Property (as hereinafter defined) held by the Bank shall be subject to
a security interest in favor of the Bank as security for any and all Liabilities
(as hereinafter defined). The term "Property" shall mean the balance of every
deposit account of the Borrower with the Bank or any of the Bank's nominees or
agents and all other obligations of the Bank or any of its nominees or agents to
the Borrower, whether now existing or hereafter arising, and all other personal
property of the Borrower (including without limitation all money, accounts,
general intangibles, goods, instruments, documents and chattel paper) which, or
evidence of which, are now or at any time in the future shall come into the
possession or under the control of or be in transit to the Bank or any of its
nominees or agents for any purpose, whether or not accepted for the purposes for
which it was delivered. The term "Liabilities" shall mean the indebtedness
evidenced by this Note and all other indebtedness, liabilities and obligations
of any kind of the Borrower (or any partnership or other group of which the
Borrower is a member) to (a) the Bank, (b) any group of which the Bank is a
member, or (c) any other person if the Bank has a participation or other
interest in such indebtedness, liabilities or obligations, whether (i) for the
Bank's own account or as agent for others, (ii) acquired directly or indirectly
by the bank from the Borrower or others, (iii) absolute or contingent, joint or
several, secured or unsecured, liquidated or unliquidated, due or not due,
contractual or tortious, now existing or hereafter arising, or (iv) incurred by
the Borrower as principal, surety, endorser, guarantor or otherwise, and
including without limitation all expenses, including attorneys' fees, incurred
by the Bank in connection with any such indebtedness, liabilities or obligations
or any of the Property (including any sale or other disposition of the
Property).
3. Prepayment. The Borrower shall have the right to prepay this Note in whole
at any time or in part from time to time (but if in part, in the principal
amount of $5,000.00 or any whole multiple thereof), in each case upon not less
than 10 days prior written notice to the Bank, without penalty or premium,
provided that on each prepayment the Borrower shall pay accrued interest on the
principal amount so prepaid to the date of such prepayment, and each partial
prepayment shall be applied to the installments of this Note in the inverse
order of their stated maturities.
4. Manner of Payment. All payments by the Borrower on account of principal,
interest or fees hereunder shall be made in lawful money of the United States of
America, in immediately available funds. The Borrower authorizes (but shall not
require) the Bank to debit any account maintained by the Borrower with the Bank,
at any date on which a payment is due under this Note, in an amount equal to any
unpaid portion of such payment. If any payment of principal or interest becomes
due on a day on which the Bank is closed (as required or permitted by law or
otherwise), such payment shall be made not later than the next succeeding
business day, and such extension shall be included in computing interest in
connection with such payment.
B. EVENTS OF DEFAULT: REMEDIES
If any of the following events shall occur and be continuing:
1. the Borrower shall fail to make any payment of principal of or interest on
this Note, or any fee provided for herein, when due;
2. the Borrower shall default in the performance or observance of any
covenant or agreement contained herein;
3. an event of default or default shall occur and be continuing under any
other agreement, document or instrument executed and delivered to the Bank by
the Borrower or any guarantor or hypothecator relating to any Liabilities;
4. any representation or warranty made by or on behalf of the Borrower in
this Note or in any other certificate, agreement, instrument or statement
delivered to the Bank by or on behalf of the Borrower shall at any time prove to
have been incorrect when made in any material respect;
5. the Borrower or any Subsidiary (as hereinafter defined) shall default in
the payment of principal of or interest on any indebtedness for borrowed money
(including any such indebtedness in the nature of a lease) or shall default in
the performance or observance of the terms of any instrument pursuant to which
such indebtedness was created or is secured, the effect of which default is to
cause or permit any holder of any such indebtedness to cause the same to become
due prior to its stated maturity (and whether or not such default is waived by
the holder thereof);
6. any change in the condition or affairs (financial or otherwise) of the
Borrower or any Subsidiary shall occur which, in the opinion of the Bank,
increases its risk with respect to the loan evidenced by this Note or impairs
any security therefor;
7. any judgment against the Borrower or any Subsidiary or any attachment,
levy or execution against any of their properties for any amount shall remain
unpaid, or shall not be released, discharged, dismissed, stayed or fully bonded
for a period of thirty (30) days or more after its entry, issue or levy, as the
case may be;
8. the Borrower or any Subsidiary shall become insolvent (however evidenced)
or be unable, or admit in writing its inability, to pay its debts as they
mature; or
9. the Borrower or any Subsidiary shall make an assignment for the benefit of
creditors, or a trustee, receiver or liquidator shall be appointed for the
Borrower or any Subsidiary or for any of their property, or the commencement of
any proceedings by the Borrower or any Subsidiary under any bankruptcy,
reorganization, arrangement of debt, insolvency, readjustment of debt,
receivership, liquidation or dissolution law or statute (including, if the
Borrower is a partnership, its dissolution pursuant to any agreement or
statute), or the commencement of any such proceedings without the consent of the
Borrower or any Subsidiary and such proceedings shall continue undischarged for
a period of 30 days, or the death of the Borrower (if an individual) or any
member of the Borrower (if a partnership) [or]
10. [Other] (4) - Philip Friedman shall not at all times be active
in the management of the borrower.
then and in any such events the Bank may declare the entire unpaid principal
amount of this Note and all interest and fees accrued and unpaid hereon to be
forthwith due and payable, whereupon the same shall become and be forthwith due
and payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrower. The balance of every account
of the Borrower with, and each claim of the Borrower against, the Bank existing
from time to time shall be subject to a lien and subject to be set off against
any and all Liabilities, including those hereunder.
For purposes of this Note, the term "Subsidiary" shall mean and include any
corporation of which more than 50% of the outstanding shares of capital stock
having ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether or not at the time capital stock of
any other class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency) is at the time, directly or indirectly,
owned by the Borrower or by one or more other Subsidiaries.
C. MISCELLANEOUS
1. Covenants. So long as this Note shall remain outstanding, the Borrower
agrees to (a) furnish to the Bank within 90 days after the end of each fiscal
year of the Borrower, financial statements (including a balance sheet and an
operating statement), prepared and certified by independent accountants
acceptable to the Bank, and within 45 days after the end of each fiscal quarter
of the Borrower, unaudited quarterly financial statements (including a balance
sheet and an operating statement), (b) furnish to the Bank, with reasonable
promptness, such other information concerning the business, operations,
properties and condition, financial or otherwise, of the Borrower as the Bank
may reasonably request from time to time, and (c) at any reasonable time and
from time to time, permitted Bank or any of its agents or representatives to
examine and make copies of and abstracts from its records and books of account,
visit its properties and discuss its affairs, finances and accounts with any of
its officers, directors or independent accountants.
2. No Waiver; Remedies Cumulative. No failure on the part of the Bank to
exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Bank of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
3. Costs and Expenses. The Borrower shall reimburse the Bank for all costs
and shall pay the pay the reasonable fees and disbursements of counsel to the
Bank in connection with enforcement of the Bank's rights hereunder. The Borrower
shall also pay any and all taxes (other than taxes on or measured by net income
of the holder of this Note) incurred ar payable in connection with the execution
and delivery of this Note.
4. Amendments. No amendment, modification or waiver of any provision of
this Note nor consent to any departure by the Borrower therefrom shall be
effective unless the same shall be in writing and signed by the Bank and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
5. Construction. This Note shall be deemed to be a contract made under the
laws of the State of New York and shall be construed in accordance with the laws
of said State.
6. Successors and Assigns. This Note shall be binding upon the Borrower and
its heirs, legal representatives, successors and assigns and the terms hereof
shall inure to the benefit of the Bank and its successors and assigns, including
subsequent holders hereof.
7. Severability. The provisions of this Note are severable, and if any
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Note in any jurisdiction.
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(4) Insert the word "None" if no additional events of default are to be
included in this Note.
8. Jurisdiction; Waiver of Jury Trial. The Borrower hereby irrevocably
consents to the jurisdiction of any New York State or Federal court located in
New York City over any action or proceeding arising out of any dispute between
the Borrower and the Bank and the Borrower further irrevocably consents to the
service of process in any such action or proceeding by the mailing of a copy of
such process to the Borrower at the address set forth below. In the event of
litigation between the Borrower and the Bank over any matter connected with
this Note or resulting from transactions hereunder, the right to a trial by
jury is hereby waived by the Borrower and the Bank.
D. ADDITIONAL PROVISIONS (5)
So long as the Note shall remain outstanding, and unless the Bank shall
otherwise consent in writing, the Borrower will not:
1) Tangible Net Worth
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Permit Tangible Net Worth of the Borrower, plus Subordinated Debt to be
less than $1,400,000.00 at 12/31/94 and anytime thereafter. "Tangible Net
Worth" shall mean the excess of the total assets of the Borrower over its
Total Liabilities, excluding, however, from the determination of total
assets, all assets which would be classified as intangible under generally
accepted accounting principles, including, without limitation, patents,
trademarks, trade names, copyrights, franchises, deferred charges and
goodwill, and any writeup of the book value of assets since 12/31/93.
"Subordinated Debt" shall mean debt subordinated to the Bank only.
2) Working Capital
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Permit the Working Capital of the Borrower at any time to be less than
$1,200,000.00. "Working Capital" shall mean the excess of Current Assets
over Current Liabilities of the Borrower, both determined in accordance
with generally accepted accounting principle.
3) Ratio of Liabilities to Net Worth plus Subordinated Debt
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Permit the Total Liabilities of the Borrower less at Subordinated Debt at
any time to be greater than (375%) of the Tangible Net Worth of the
Borrower plus Subordinated Debt. "Total Liabilities" shall mean all items
of liability, indebtedness and obligation of the of Borrower which would,
in accordance with generally accepted accounting principals, be classified
as liabilities on the balance sheet of the Borrower.
Computer Generated Solutions, Inc.
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(Name of Borrower)
By: /s/ Philip Friedman
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Philip Friedman, President (Title)
By:
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(Title)
1250 Broadway, New York, N.Y. 10001
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(Address of Borrower)
[Corporate Seal]
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(5) Insert the word "None" if no additional provisions are to be included in
this Note.
FIRST AMENDMENT TO INSTALLMENT PROMISSORY NOTE
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AGREEMENT, made as of the 13 day of July 1995 between BANK LEUMI TRUST COMPANY
OF NEW YORK, a New York banking corporation, having an office at 562 Fifth
Avenue, New York, New York 10036 ( "Bank" ) and COMPUTER GENERATED SOLUTIONS,
INC., a Delaware corporation , having an office at 535 Seventh Avenue, New
York, New York 10018 (" Borrower") .
W I T N E S S E T H:
WHEREAS:
(a) Borrower executed an Installment Promissory Note in favor of the Bank
dated June 29, 1994, in the original principal amount of $800,000 ("Note");
(b) For good and valuable consideration, the Bank and the Borrower desire to
modify the Tangible Net Worth covenant in the Note as hereinafter set forth.
NOW, THEREFORE, the parties hereto intending to be legally bound and in
consideration of the mutual covenants and conditions herein contained, hereby
agree as follows:
(1) The first sentence of section D(1) of the Note is hereby deleted and
replaced with the following, "Permit Tangible Net Worth of the Borrower, plus
Subordinated Debt, to be less than $1,400,000 at December 31, 1994, $1,600,000
at December 31, 1995 and any time thereafter."
(2) The Note, as modified hereby, shall continue to be secured by an all
asset lien on assets of the Borrower and the Limited Guaranty of Philip
Friedman.
(3) Except as herein set forth, the terms and conditions of the Note, and
all other documents and instruments in connection therewith shall remain
unmodified and in full force and effect. The Borrower certifies that no offsets
or defenses exist in connection with the Note, as modified hereby. This
Agreement will be binding upon the Borrower and its successors and assigns and
the terms hereof shall inure to the benefit of the Bank and its successors and
assigns.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement the
day and year first above written
BANK LEUMI TRUST COMPANY OF NEW YORK
By: /s/
_____________________________________
(Title)
By:______________________________________
(Title)
COMPUTER GENERATED SOLUTIONS, INC.
By: /s/ PRESIDENT
_____________________________________
(Title)
By: _____________________________________
(Title)
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SECOND AMENDMENT TO INSTALLMENT PROMISSORY NOTE
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AGREEMENT, made as of the as of the 21 day of December 1995 between BANK
LEUMI TRUST COMPANY OF NEW YORK, a New York banking corporation, having an
office at 562 Fifth Avenue, New York, New York 10036 ("Bank") and COMPUTER
GENERATED SOLUTIONS, INC., a Delaware corporation having an office at 1675
Broadway, New York, New York 10019 ("Borrower").
W I T N E S S E T H:
WHEREAS:
(a) Borrower executed an Installment Promissory Note in favor of the Bank
dated June 29, 1994, in the original principal amount of S800,000 ("Note");
(b) Borrower executed a First Amendment to the Note on July 13, 1995. The
Note as modified is hereinafter referred to as the Amended Note.
(c) For good and valuable consideration, the Bank and the Borrower desire to
modify the Amended Note as hereinafter set forth.
NOW, THEREFORE, the parties hereto intending to be legally bound, and in
consideration of the mutual covenants and conditions herein contained, hereby
agree as follows:
(1) The first sentence of section D(1) of the Amended Note is hereby deleted
and replaced with the following: "Permit Tangible Net worth of the Borrower,
plus Subordinated Debt, to be less than $1,400,00o at December 31, 1994 and
$2,500,000 at December 31, 1995 or any time thereafter."
(2) The first sentence of section D(2) of the Amended Note is hereby deleted
and replaced with the following: "Permit the Working Capital of the Borrower to
be less than $1,200,000 any time prior to December 31, 1995, $1,600, 000 at
December 31, 1995, $2,000,000 at June 30, 1996 or any time thereafter."
(3) The first sentence of section D(3) of the Amended Note is hereby deleted
and replaced with the following: "Permit the Total Liabilities of the Borrower
less Subordinated Debt to be greater than 375% of the Tangible Net Worth of the
Borrower plus Subordinated Debt
at any time prior to December 31, 1995 and 300% at December 31, 1995 or any time
thereafter."
(4) The Amended Note, as modified hereby, shall continue to be secured by a
lien on all assets of the Borrower and the Limited Guaranty of Philip Friedman.
(5) Except as herein set forth, the terms and conditions of the Amended Note,
and all other documents and instruments in connection therewith shall remain
unmodified and in full force and effect. The Borrower certifies that no offsets
or defenses exist in connection with the Amended Note, as modified hereby. This
Agreement will be binding upon the Borrower and its successors and assigns and
the terms hereof shall inure to the benefit of the Bank and its successors and
assigns.
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Agreement the
day and year first above written.
BANK LEUMI TRUST COMPANY OF NEW YORK
By: /s/
____________________________________
(Title)
By:____________________________________
(Title)
COMPUTER GENERATED SOLUTIONS, INC.
By: /s/ PRESIDENT
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(Title)
By:____________________________________
(Title)
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