Exhibit 10.19
$827,500.00 Chicago, Illinois
April 30, 2001
TERM NOTE
THIS TERM NOTE (this "Note"), made in Chicago, Illinois, as of April 30,
2001, for EIGHT HUNDRED TWENTY-SEVEN THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($827,500.00), with interest as provided herein.
1. (a) This Note is made by LEARNCOM, INC., an Illinois corporation with
its principal place of business located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000; LEARNCOM, INC., a Nevada corporation with its principal place of
business located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000;
VIDEOLEARNING SYSTEMS, INC., a Pennsylvania corporation with its principal place
of business located at 000 Xxxx Xxxxxxxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000; BNA
COMMUNICATIONS INC., a Delaware corporation with its principal place of business
located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000; and TS
ACQUISITIONS, INC. with its principal place of business located at 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000 (referred to herein collectively
as the, "Maker"), and AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a
national banking association, with its principal place of business at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Lender"). Xxxxxx and any subsequent
holder from time to time of this Note is sometimes hereinafter referred to as
"Payee." The amount disbursed by Lender to Maker, repayment of which is
evidenced by this Note, is sometimes hereinafter referred to as the "Loan."
(b) Maker hereby promises to pay to the order of Payee the principal
sum of EIGHT HUNDRED TWENTY-SEVEN THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($827,500.00), in lawful money of the United States of America, and to pay
interest on the balance of principal outstanding and unpaid hereon from the date
hereof until the maturity hereof (whether by lapse of time, acceleration or
otherwise) at the rate per annum equal to the "Prime Rate" of Lender as
announced by Xxxxxx from time to time in effect hereunder PLUS one and
twenty-five one hundredths of one percent (1.25%) and, after the (i) the Term
Loan Maturity Date or (ii) occurrence of an Event of Default hereunder, the rate
per annum from time to time in effect under the terms hereof PLUS three percent
(3%) (the "Default Interest Rate") on a floating basis, computed and payable
monthly in arrears on the basis of actual days elapsed and a three hundred and
sixty (360) day year.
(c) Installments of interest shall be paid monthly in arrears
commencing the last Business Day of the calendar month during which the loan
evidenced hereby is made and continuing thereafter on the last Business Day of
each successive calendar month. Borrower shall make a one-time principal payment
on the Term Note of not less than One Hundred Thousand and No/100ths Dollars
($100,000.00) on or before July 29, 2001. Installments of principal in the
amount of Fifteen Thousand and No/100 Dollars ($15,000.00), plus interest as
aforesaid on the outstanding principal amount of the Term
Note, shall be paid monthly in arrears commencing on the last Business Day of
the calendar month during which the loan evidenced hereby is made and continuing
thereafter on the last Business Day of each successive calendar month thereafter
through and including March 31, 2002 (the "Term Maturity Date"). Borrower shall
make a final payment of all accrued, unpaid interest, together with the
outstanding principal balance of the indebtedness evidenced hereby, on the
Maturity Date.
(d) This Note is issued pursuant to the terms of a Loan and Security
Agreement of even date herewith executed by Maker and Lender (the "Loan
Agreement"), and is secured by, among other things, (i) the Loan Agreement; (ii)
that certain Security Agreement of even date herewith executed by Maker and
Lender (said Security Agreement, as the same may be amended, is hereinafter
referred to as the "Security Agreement"); and (iii) the Other Agreements (as
defined in the Loan Agreement) (collectively, such agreements, documents and
instruments may be hereinafter collectively referred to as the "Loan
Documents"). All of the agreements, conditions, covenants, provisions and
stipulations contained in the Loan Documents are hereby made a part of this Note
to the same extent and with the same force and effect as if they were fully set
forth herein and Maker covenants and agrees to keep and perform them, or cause
them to be kept and performed, strictly in accordance with their terms.
(e) Interest on all payments on account of the indebtedness evidenced
by this Note shall first be applied to late charges and costs and fees incurred
by Xxxxx in enforcing its rights hereunder or under the Loan Documents, next to
interest on the unpaid principal balance hereunder and the remainder to reduce
the unpaid principal balance hereunder.
(f) Interest shall be computed on the basis of a three hundred sixty
(360) day year consisting of twelve (12) thirty (30) day months.
(g) From and after the (i) Term Loan Maturity date or (ii) occurrence
of an Event of Default (as such term is hereinafter defined) hereunder, any sums
remaining unpaid hereunder shall bear interest at the "Default Interest Rate."
The "Default Interest Rate" shall mean three percent (3%) in excess of the
interest rate per annum otherwise applicable hereunder. Default interest shall
be computed on the basis of a three hundred sixty (360) day year consisting of
twelve (12) months.
(h) If any installment of principal or interest due hereunder shall
become overdue for five (5) days after the date when due, the undersigned shall
pay to the holder hereof on demand a "late charge" of five cents ($.05) for each
dollar so overdue in order to defray part of the increased cost of collection
occasioned by any such late payment, as liquidated damages and not as a penalty.
(i) Payment of all amounts due under this Note shall be made at the
office of Lender, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other place as Payee may from time to time designate in writing.
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(j) Notwithstanding any provisions of this Note or of the Loan
Documents to the contrary, it is the intent of Maker and Payee that Payee shall
never be entitled to receive, collect or apply, as interest on principal of the
indebtedness, any amount in excess of the maximum rate of interest permitted to
be charged by applicable law; and if under any circumstance whatsoever,
fulfillment of any provision of this Note, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by applicable law, then, IPSO FACTO, the obligation to be fulfilled
shall be reduced to the limit of such validity; and in the event Payee ever
receives, collects or applies as interest any such excess, such amount which
would be excess interest shall be deemed a permitted partial prepayment of
principal without penalty or premium and treated hereunder as such; and if the
principal of the indebtedness secured hereby is paid in full, any remaining
excess funds shall forthwith be paid to Maker. In determining whether or not
interest of any kind payable hereunder or under any specific contingency exceeds
the highest lawful rate, Maker and Payee shall, to the maximum extent permitted
under applicable law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as interest and (ii) amortize, prorate, allocate and
spread throughout the remaining term hereof such payment so that the interest on
account of such indebtedness does not exceed the maximum amount permitted by
applicable law. Payee shall not be subject to any penalties provided by any laws
for contracting for, charging or receiving interest in excess of the maximum
lawful rate.
2. Maker may prepay the Loan, in whole but not in part, upon thirty (30)
days prior written notice.
3. (a) In the event (i) default is made in the payment of any part of
the principal or interest due pursuant to this Note as the same becomes due and
payable, or of any sums advanced pursuant to the terms of the Loan Agreement or
any of the other Loan Documents; or (ii) default is made in the performance or
observance of any covenant, agreement, term or condition contained in this Note;
or (iii) there shall be a default or an Event of Default under the Loan
Agreement or any of the other Loan Documents, then in the case of any of the
defaults set forth above (an "Event of Default"), Payee shall have the option,
without demand or notice, to declare the unpaid principal of this Note, together
with all accrued interest, if any, and other sums secured by the Loan Agreement
or any of the other Loan Documents, at once due and payable to the extent
permitted by law, to foreclose all liens or security interests securing the
payment of the Note, and to exercise any and all other rights and remedies
available at law or in equity or under the Loan Agree ment or any of the other
Loan Documents.
(b) The remedies of Payee as provided herein or in the Loan Documents
shall be cumulative and concurrent, and may be pursued singularly, successively
or together, at the sole discretion of Payee, and may be exercised as often as
occasion therefor shall arise. No act of omission or commission of Payee,
including specifically any failure to exercise any right, remedy or recourse,
shall be deemed to be a waiver or release of the same, such waiver or release to
be effected only through a written document executed by Xxxxx and then only to
the extent specifically recited therein. A waiver or
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release with reference to any one event shall not be construed as continuing, as
a bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to a subsequent event.
4. If any Event of Default under this Note shall occur, Maker promises to
pay all costs of collection of every kind, including, without limitation, all
appraisal costs, reasonable attorneys' fees, court costs, and expenses of every
kind incurred by Payee in connection with such collection or the protection or
enforcement of any or all of the security for this Note, whether or not any
lawsuit is filed with respect thereto.
5. Maker represents, covenants, agrees and warrants that all proceeds of
the Loan evidenced by this Note will be used for the purposes specified in 815
ILCS 205/4(1)(c), and that the indebtedness secured hereby constitutes a
business loan which comes within the purview of 815 ILCS 205/4(1)(c).
6. Except as otherwise expressly provided herein or in the other Loan
Documents, each maker, surety and endorser hereon waives grace, notice, notice
of intent to accelerate, notice of default, protest, demand, presentment for
payment and diligence in the collection of this Note, and in the filing of suit
hereon, and agrees that its liability and the liability of its heirs,
beneficiaries, successors and assigns for the payment hereof shall not be
affected or impaired by any release or change in the security or by any
increase, modification, renewal or extension of the indebtedness or its mode and
time of payment. It is specifically agreed by the undersigned that Payee shall
have the right at all times to decline to make any such release or change in any
security given to secure the payment hereof and to decline to make any such
increase, modification, renewal or extension of the indebtedness or its mode and
time of payment.
7. Maker expressly and unconditionally waives, in connection with any
suit, action or proceeding brought by Lender on this Note, any and every right
it may have to (i) injunctive relief, (ii) interpose any counterclaim therein,
and (iii) have the same consolidated with any other or separate suit, action or
proceeding.
MAKER WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS (1) UNDER THIS NOTE OR ANY RELATED AGREEMENT OR
UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (2) ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS NOTE, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
8. Any and all notices given in connection with this Note shall be deemed
adequately given only if in writing and (i) personally delivered; or (ii) sent
by a nationally- recognized overnight courier service; or (iii) sent by
certified United States mail, postage prepaid, return receipt requested, to the
party or parties for whom such notices are
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intended. A written notice shall be deemed received (i) when delivered in
person; (ii) on the next business day immediately following the day sent by
overnight courier; and (iii) on the third (3rd) business day following the day
sent by certified mail. A written notice shall also be deemed received on (i)
the date delivery shall have been refused at the address required by this Note;
or (ii) with respect to notices sent by United States mail but not delivered,
the date as of which the postal service shall have indicated such notice to be
undeliverable at the address required by this Note. Any and all notices referred
to in this Note or which any party desires to give to another shall be addressed
as follows:
As to Maker: c/o LearnCom, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
with a courtesy copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 000000
Attention: Xxxxx Xxxxxxxx
As to Lender: American National Bank and Trust
Company of Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xx Xxxx
with a courtesy copy to: Xxxxxx Xxxxxxx & Xxxxxxxxx LLC
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
or in such other manner or to such other address, as such party shall designate
in a written notice to the other party hereto.
9. If any provision of this Note or any payments pursuant to the terms
hereof shall be invalid or unenforceable to any extent, the remainder of this
Note and any other payments hereunder shall not be affected thereby and shall be
enforceable to the greatest extent permitted by law.
10. Maker hereby consents to Xxxxx's grant of participations in or the
sale, assignment, transfer or other disposition, at any time and from time to
time hereafter, of this Note or any of the other Loan Documents, or of any
portion of any thereof, including, without limitation, Xxxxx's rights, titles,
interest, remedies, powers and/or duties. Xxxxx may furnish any information
concerning Maker in the possession of Payee from time to time to assignees of
the rights and/or obligations of Payee hereunder and to participants
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in any disbursement of the Loan (including prospective assignees and
participants) and may furnish information in responses to credit inquiries
consistent with general banking practice. This Note and the other Loan Documents
shall, unless otherwise expressly provided therein, be deemed to have been
negotiated and entered into in, and shall be governed and controlled by, the
laws of the State of Illinois as to interpretation, enforcement, validity,
construction, effect, choice of law, and in all other respects, including,
without limitation, the legality of the interest rate and other charges, but
excluding perfection of security interest and liens which shall be governed and
controlled by the laws of the relevant jurisdiction.
11. At any time, and from time to time, upon request of Payee, Maker will
make, execute and deliver, or will cause to be made, executed or delivered, to
Payee or to Payee's designee, and when requested by Xxxxx, cause to be filed,
recorded, refiled, or rerecorded, as the case may be, at such times and in such
offices and places as Payee may deem appropriate, any and all instruments of
further assurance, certificates and other documents as may, in the sole opinion
of Payee, be necessary or desirable in order to effectuate, complete, perfect,
continue, or preserve the obligations of Maker under this Note, the Loan
Agreement and the other Loan Documents.
12. If Maker fails to do any of the things referred to herein, Payee may
do so for and in the name of Maker and at Maker's expense. For such purposes,
Maker hereby irrevocably appoints Payee as Maker's attorney-in-fact for the
purpose of making, executing, delivering, filing, recording, and doing all other
things as may be necessary or desirable, in Xxxxx's sole opinion, to accomplish
the matters referred to herein. The power of attorney given herein is a power
coupled with an interest and shall be irrevocable so long as any part of the
obligations of Maker to Payee remains unpaid or unperformed.
13. (a) All payments under this Note shall be payable in lawful money of
the United States which shall be legal tender for public and private debts at
the time of payment; provided that a check will be deemed sufficient payment so
long as it clears when presented for payment. Each payment of principal or
interest under this Note shall be paid not later than 2:00 P.M. Chicago time on
the date due therefor and funds received after that hour shall be deemed to have
been received by Xxxxx on the following day. Except as otherwise provided
herein, all payments (whether of principal, interest or other amounts) which are
applied at any time by Payee to indebtedness evidenced by this Note may be
allocated by Payee to principal, interest or other amounts as Payee may
determine in Xxxxx's sole discretion.
(b) This Note has been made and delivered at Chicago, Illinois and
all funds disbursed to or for the benefit of Maker will be disbursed in Chicago,
Illinois.
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(c) The obligations and liabilities under this Note of Maker shall be
joint and several and binding upon and enforceable against Maker and its
successors and assigns. This Note shall inure to the benefit of and may be
enforced by Xxxxxx, its successors and assigns.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Maker has executed this Note as of the date first above
written.
LEARNCOM, INC., an Illinois corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President and CEO
LEARNCOM, INC., a Nevada corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President and CEO
VIDEOLEARNING SYSTEMS, INC., a
Pennsylvania corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President and CEO
BNA COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President and CEO
TS ACQUISITIONS, INC.,
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President and CEO
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