Exhibit 10.1
PROMISSORY NOTE
Borrower: CARDIODYNAMICS INTERNATIONAL Lender: City National Bank, a National Banking Association
CORPORATION, A CALIFORNIA CORPORATION Westside Commercial Banking Center #067000
6175 Xxxxx Xxxxx Xxxxx, Xxxxx 000 000 Xxxxx Xxxxxxx Drive, Third Floor
Xxx Xxxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
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Principal Amount: $2,000,000.00 Date of Note: February 25, 1999
PROMISE TO PAY. CARDIODYNAMICS INTERNATIONAL CORPORATION, A CALIFORNIA
CORPORATION ("Borrower") promises to pay to City National Bank, a National
Banking Association ("Lender"), or order, in lawful money of the United States
of America, the principal amount of Two Million & 00/100 Dollars
($2,000,000.00), together with interest on the unpaid principal balance from
March 31, 1999, until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
12 consecutive monthly interest payments, beginning May 1, 1999, with
interest calculated on the unpaid principal balances at an interest rate
of 0.00 percentage points over the Index described below; 23 consecutive
monthly interest payments, beginning May 1, 2000, with interest calculated
on the unpaid principal balances at an interest rate of 1.000 percentage
points over the Index described below; 23 consecutive monthly principal
payments of $83,333.33 each, beginning May 1, 2000, with interest
calculated on the unpaid principal balances at an interest rate of 1.000
percentage points over the Index described below; and 1 principal and
interest payment in the initial amount of $83,961.30 on April 1, 2002,
with interest calculated on the unpaid principal balances at an interest
rate of 1.000 percentage points over the Index described below. This
estimated final payment is based on the assumption that all payments will
be made exactly as scheduled and that the Index does not change; the
actual final payment will be for all principal and accrued interest not
yet paid, together with any other unpaid amounts under this Note.
The annual interest rate for this Note is computed on a 365/360 basis; that
is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at Lender's address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments
will be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the City National Bank
Prime Rate (the "Index"). Prime Rate shall mean the rate most recently
announced by Lender at its principal office in Beverly Hills, California, as
its "Prime Rate." Any change in the Prime Rate shall become effective on the
same business day on which the Prime Rate shall change, without prior notice
to Borrower. Lender will tell Borrower the current Index rate upon Borrower's
request. Borrower understands that Lender may make loans based on other rates
as well. The interest rate change will not occur more often than each day.
The Index currently is 7.750%. The interest rate or rates to be applied to
the unpaid principal balance of this Note will be the rate or rates set forth
above in the "Payment" section. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable
law. Whenever increases occur in the interest rate, Lender, at its option,
may do one or more of the following: (a) increase Borrower's payments to
ensure Borrower's loan will pay off by its original final maturity date, (b)
increase Borrower's payments to cover accruing interest, (c) increase the
number of Borrower's payments, and (d) continue Borrower's payments at the
same amount and increase Borrower's final payment.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment
of this Note, Borrower understands that Lender is entitled to a minimum
interest charge of $100.00. Other than Borrower's obligation to pay any
minimum interest charge, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower's obligation to
continue to make payments under the payment schedule. Rather, they will
reduce the principal balance due and may result in Borrower making fewer
payments.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender and such failure continues for more than 10 days.
(c) Any representation or statement made or furnished to Lender by Borrower or
on Borrower's behalf is false or misleading in any material respect either now
or at the time made or furnished. (d) Borrower becomes insolvent, a receiver
is appointed for any part of Borrower's property, Borrower makes an assignment
for the benefit of creditors, or any proceeding is commenced either by
Borrower or against Borrower under any bankruptcy or insolvency laws and such
proceeding has not been dismissed within 10 days. (e) Any guarantor dies or
any of the other events described in this default section occurs with respect
to any guarantor of this Note. (f) A material adverse change occurs in
Borrower's financial condition, or Lender reasonably believes the prospect of
payment or performance of the Indebtedness is materially impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to
pay all amounts declared due pursuant to this section, including failure to
pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note by 5.000
percentage points. Lender may hire or pay someone else to help collect this
Note if Borrower does not pay. Borrower also will pay Lender that amount.
This includes, subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses whether or not there is a lawsuit, including
attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgement collection services. Borrower also will pay
any court costs, in addition to all other sums provided by law. This Note has
been delivered to Lender and accepted by Lender in the State of California.
If there is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Los Angeles County, the State of California.
This Note shall be governed by and construed in accordance with the laws of
the State of California.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
02-25-1999 PROMISSORY NOTE Page 2
Loan No 32692 (Continued)
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ADDITIONAL EVENT OF DEFAULT. Any material default by Borrower or Xxxxx X.
Xxxxxxx, Guarantor, in the payment or performance of any obligation, or any
default under any provisions of any contract or instrument pursuant to which
any of such parties has incurred any obligation for borrowed money, any
purchase obligation or any other liability of any kind to any person or
entity, including Lender.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive any applicable statute of limitations, presentment, demand for payment,
protest and notice of dishonor. Upon any change in the terms of this Note,
and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
BORROWER:
CARDIODYNAMICS INTERNATIONAL CORPORATION, A CALIFORNIA CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
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XXXXX X. XXXXXX, CHIEF FINANCIAL XXXXXXX X. XXXXX, CHIEF EXECUTIVE
OFFICER/SECY. OFFICER
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