Exhibit 10.1
PROMISSORY NOTE
US $177,937 July 29, 2005
Subject to the terms and conditions of this Promissory Note (this "Note"),
for value received, the undersigned ISI Merger Corp. ("Merger Sub"), a Delaware
corporation with an address of 100 Eagle Rock Avenue, East Hanover, New Jersey
07936, hereby promises to pay to ADAM HOCK, an individual residing at 630 First
Avenue, Apt. 35C, New York, New York 10016, and LARRY HOCK, an individual
residing at 4210 West Beachway Drive, Tampa, Florida 33609 (collectively, the
"Holder"), the principal amount of One Hundred Seventy Seven Thousand Nine
Hundred Thirty Seven Dollars ($177,937) as provided herein.
This Note is issued and delivered pursuant to the Agreement and Plan of
Merger, dated as of July 28, 2005 (the "Merger Agreement"), by and among
Conversion Services International, Inc. ("CSI"), Merger Sub, Integrated
Strategies, Inc. ("ISI"), ISI Consulting, LLC ("LLC") and Holder. The following
is a statement of the rights of the Holder of this Note and the terms and
conditions to which this Note is subject, and to which the Holder, by acceptance
of this Note, agrees:
1. Principal Repayment. The payment of the principal of this Note is
contingent upon the actual receipt by Merger Sub of collection receipts from the
Acquired Accounts Receivable (as hereinafter defined), less any and all
out-of-pocket expenses incurred by Merger Sub with respect to such collections.
As used herein, "Acquired Accounts Receivable" shall mean the accounts
receivable of ISI and LLC acquired by Merger Sub at the closing of the
transactions contemplated by the Merger Agreement. The Holder shall not be paid
on any Acquired Accounts Receivable due under this Note until $352,063 of the
Acquired Accounts Receivable have been first collected by Merger Sub or CSI.
2. Interest. This Note shall be non-interest bearing.
3. Maturity. Provided that the condition set forth in Section 1
hereinabove is satisfied, the principal of this Note shall be due and payable by
5:00 PM Eastern Standard Time on the seventh (7th) business day following the
day that Merger Sub actually receives a collection receipt from an Acquired
Accounts Receivable (the "Payment Period"). In the event that the an Acquired
Accounts Receivable is collected by Merger Sub and not paid as payment on this
Note within the Payment Period, the Holder shall have the opportunity to claim a
default for the amount due. Merger Sub shall have the opportunity to cure this
default within three (3) business days of receipt of a default notice (the "Cure
Period") from Holder and make the requisite payment in full. If payment in full
has not been made to the Holder by the end of the Cure Period, the Holder shall
receive a consent judgment for the Acquired Accounts Receivable collected by
Merger Sub due. In the event that payment has been made during the Cure Period,
there shall be no consent judgment for the Holder. In the event a consent
judgment is received at any time, any subsequent judgment(s) received in
accordance with the above payment terms shall be for the entire outstanding
balance of this Note.
4. Payment. All payments with respect to this Note shall be made in lawful
money of the United States of America at such place as the Holder hereof may
reasonably designate in writing to Merger Sub.
5. No Security. This Note is unsecured.
6. Mutilated, Destroyed, Lost or Stolen Note. In case this Note shall
become mutilated or defaced, or be destroyed, lost or stolen, Merger Sub shall
execute and deliver a new note of like principal amount in exchange and
substitution for the mutilated or defaced Note, or in lieu of and in
substitution for the destroyed, lost or stolen Note. In the case of a mutilated
or defaced Note, the Holder shall surrender such Note to Merger Sub. In the case
of any destroyed, lost or stolen Note, the Holder shall furnish to Merger Sub:
(a) evidence to its satisfaction of the destruction, loss or theft of such Note,
and (b) such security or indemnity as may be reasonably required by Merger Sub
to hold Merger Sub harmless.
7. Assignment. The rights and obligations of Merger Sub and the Holder of
this Note shall be binding upon, and inure to the benefit of, their permitted
successors, assigns, heirs, administrators and transferees. Notwithstanding the
foregoing, the Holder may not assign, pledge or otherwise transfer this Note
without the prior written consent of Merger Sub. Payment under this Note shall
be made only to the registered holder of this Note.
8. Waiver and Amendment. Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of Merger
Sub and the Holder.
9. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid, or delivered by facsimile transmission, to Merger Sub or to the Holder
at the addresses set forth herein below. Any party hereto may by notice so given
change its address for future notice hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the manner set forth above and shall be deemed to have been received
when delivered or, if notice is given by facsimile transmission, when delivered
with confirmation of receipt.
If to Merger Sub, to:
ISI Merger Corp.
100 Eagle Rock Avenue
East Hanover, NJ 07936
Attention: Scott Newman
Fax: 973-560-9500
with a copy to:
Ellenoff Grossman & Schole LLP
370 Lexington Avenue
New York, NY 10017
Attention: Barry I. Grossman, Esq.
Fax: 212-370-7889
If to Holder, to:
Mr. Adam Hock
630 First Avenue, Apt. 35C
New York, New York 10016
Fax:
Mr. Larry Hock
4210 West Beachway Drive
Tampa, Florida 33609
Fax:
With a copy to:
Foley & Lardner LLP
100 North Tampa Street, Suite 2700
Tampa, FL 33602
Attention: Richard H. Agster, Esq.
Fax: 813-221-4210
10. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New Jersey, excluding that body of law
relating to conflicts of laws.
11. Severability. If one or more provisions of this Note are held to be
unenforceable under applicable law, such provisions shall be excluded from this
Note, and the balance of this Note shall be interpreted as if such provisions
were so excluded and shall be enforceable in accordance with its terms.
IN WITNESS WHEREOF, Merger Sub has caused this Note to be issued in favor
of Holder as of the date first above written.
ISI MERGER CORP.
By: /s/ Scott Newman
-------------------------------------
Name: Scott Newman
Title: President