EXHIBIT 10.42
This note supercedes and replaces the note dated March 16, 2000 executed by the
Borrower in favor of the Bank in the amount of $10,000,000.00
PROMISSORY NOTE
U.S. $15,000,000.00
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October 11, 0000 Xxx Xxxx, Xxx Xxxx
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1. OBLIGATION AND REPAYMENT: For value received, Borrower absolutely and
unconditionally promises to pay to the order of the Bank, at the Office,
without defense, setoff or counterclaim, the principal amount of Fifteen
Million and 00/100 United States Dollars, together with interest and any
other sum(s) due as specified below. The principal amount of this Note
shall be due and payable as follows (complete one of the following as
applicable):
(A) [ ] ON DEMAND.
(B) On ______________, 19____.
(C) In consecutive installments, of which each but the last shall be
$_____________ and the last of which shall be equal to the then
unpaid principal balance of this Note. The first such installment
shall be due on ______________, 19__. Each subsequent installment
shall be due on the corresponding day of each month/ quarter/ other
__________ thereafter (or if there is no such corresponding day, on
the last day of such period). The remaining principal balance shall
be due on ______________, 19__.
(D) [X] In accordance with the attached Rider, but in any eveny no later
than November 30, 2001.
2. INTEREST: Subject to paragraph A(2) of the Terms and Conditions, interest
shall accrue on the principal amount of this Note outstanding from time to
time at the following rate (the "Loan Rate") (complete one of the following
as applicable):
(A) A fixed rate equal to ______% per year.
(B) A Variable Prime-Based Rate equal to the Prime Rate plus ______% per
year.
(C) [X] In accordance with the attached Rider.
Interest shall be payable monthly/ quarterly/ (other) _____________ and at
any Payment Date and at any time that any part of the principal or any
installment of this Note is paid.
3. RIDERS: IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS NOTE AND ANY
RIDER(S) TO WHICH THIS NOTE IS SUBJECT, THE PROVISIONS OF SUCH RIDER(S)
SHALL PREVAIL. THIS NOTE IS SUBJECT TO ANY RIDER(S) REFERRED TO IN
PARAGRAPH 1(D) AND/OR 2(C) AND TO THE FOLLOWING RIDER(S), ALL OF WHICH ARE
PART OF THIS NOTE:
Multiple-Loan Rider to Promissory Note
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(Libor-Based Rate)
4. ADDRESS AND IDENTIFICATION OF BORROWER:
Address: 000 Xxxxxxx Xxxxxxx
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Xxxx, XX 00000
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Telex or similar number:
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Answerback:
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Telecopy or similar number:
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Social Security or Taxpayer ID number:
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5. AGREEMENT TO ALL TERMS AND CONDITION; AUTHORIZATION TO COMPLETE BLANKS:
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH BELOW AND ON THE
REVERSE SIDE OF THIS NOTE. EACH OF THE UNDERSIGNED AGREES TO ALL OF THE
PROVISIONS OF THIS NOTE, INCLUDING THE TERMS AND CONDITIONS AND ANY
RIDER(S). THE BANK IS AUTHORIZED TO COMPLETE ANY BLANK SPACE IN THIS NOTE.
SUCH COMPLETION SHALL BE CONCLUSIVE, FINAL AND BINDING ON BORROWER IN THE
ABSENCE OF MANIFEST ERROR.
6. NO REPRESENTATIONS OR AGREEMENTS BY THE BANK: EACH OF THE UNDERSIGNED
ACKNOWLEDGES THAT THE BANK HAS MADE NO REPRESENTATION, COVENANT, COMMITMENT
OR AGREEMENT TO BORROWER EXCEPT PURSUANT TO ANY WRITTEN DOCUMENT EXECUTED
BY THE BANK.
7. NO REPRESENTATION OF NONENFORCEMENT: EACH OF THE UNDERSIGNED ACKNOWLEDGES
THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED OR INDICATED
THAT THE BANK WILL NOT ENFORCE ANY PROVISION OF THIS NOTE, INCLUDING THE
TERMS AND CONDITIONS AND ANY RIDER(S), IN THE EVENT OF LITIGATION OR
OTHERWISE.
8. WAIVER OF JURY TRIAL: BORROWER WAIVES, AND UNDERSTANDS THAT THE BANK
WAIVES, THE RIGHT TO A JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING
HEREUNDER OR RELATING TO ANY OF THE LIABILITIES; ANY JUDICIAL PROCEEDING
WITH RESPECT TO ANY SUCH DISPUTE SHALL TAKE PLACE WITHOUT A JURY.
9. EXECUTION OF PROMISSORY NOTE:
Print name of Borrower: Level 8 Systems, Inc.
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(Signature) By: /s/ Xxxxx X. Xxxx
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Print name: Xxxxx X. Xxxx
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Title or capacity: Chief Financial Officer
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(if signing on behalf of Borrower)
(Signature) By: /s/ Xxxxxx Xxxxxxxxxxx
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Print Name: Xxxxxx Xxxxxxxxxxx
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Title or capacity: President
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(if signing on behalf of Borrower)
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TERMS AND CONDITIONS
Definitions are set forth in paragraph M
A. CALCULATION AND ACCRUAL OF INTEREST: (1) GENERALITY. Interest shall be
calculated on a daily basis on outstanding balances at the Applicable Rate,
divided by 360, on the actual days elapsed. During any time that the
Applicable Rate would exceed the applicable maximum lawful rate of
interest, the Applicable Rate shall automatically be reduced to such
maximum rate. Any interest payment made in excess of such maximum rate
shall be applied as, and deemed to be, in the Bank's sole discretion, (a) a
payment of any of the Liabilities, in such manner as determined by the
Bank, or (b) cash collateral to be retained by the Bank to secure repayment
of this Note. (2) INCREASED RATE. Interest shall accrue at the Increased
Rate upon and after (a) the occurrence of any Debtor Relief Action, (b) any
demand of payment of this Note (if payable on demand) or (c) the occurrence
of any Event of Default (if this Note is payable other than on demand). (3)
ACCRUAL. To the extent permitted by Law, interest shall accrue at the
Applicable Rate on all unpaid Liabilities under this Note, including but
not limited to any unpaid interest and any unpaid obligation owed pursuant
to paragraph B (Indemnification).
B. INDEMNIFICATION: To the extent permitted by Law: (1) TAXES: All payments
under this Note shall be made free and clear of, and without deduction for,
any Taxes. If Borrower shall be required to deduct any Taxes in respect of
any sum payable under this Note, then (a) the sum payable shall be
increased so that the Bank shall receive an amount equal to the sum the
Bank would have received had no deductions been made, and (b) Borrower
shall make such deductions and shall pay the amount deducted to the
relevant Governmental Authority. Borrower shall pay to the Bank on demand,
and shall indemnify and hold the Bank harmless from, any and all Taxes paid
by the Bank and any and all liability (including penalties, interest and
expenses) with respect thereto, whether or not such Taxes were correctly or
legally asserted. Within 30 days after any Taxes are paid, Borrower shall
furnish evidence thereof to the Bank. (2) REGULATORY COSTS. In the event
that in connection
with the transaction(s), contemplated by this Note and/or the Bank's
funding of such transaction(s), the Bank is required to incur any
Regulatory Costs in order to comply with any Law issued after the date of
this Note, then Borrower shall pay the Bank on demand, and shall indemnify
and hold the Bank harmless from any and all such Regulatory Costs. (3)
COSTS AND EXPENSES. Borrower shall pay the Bank on demand, and shall
indemnify and hold the Bank harmless from, any and all costs and expenses.
(4) PREPAYMENT COSTS. If Borrower makes any payment of Prepaid Principal
(voluntarily or not), and if the Applicable Rate with respect to such
Prepaid Principal is not a Variable Prime-Based Rate, then Borrower shall
pay to the Bank an amount sufficient to compensate the Bank for its
Prepayment Costs. Borrower acknowledges that determining the actual amount
of Prepayment Costs may be difficult or impossible in any specific
instance. Accordingly, Borrower agrees that Prepayment Costs shall be
deemed to be the excess, if any, of (i) the product of (A) the Prepaid
Principle, times (B) the Applicable Rate divided by 360, times (C) the
remaining number of days from the date of the payment to the applicable
Payment Date, over (ii) that amount of interest which the Bank determines
that the holder of a Treasury Obligation selected by the Bank in the amount
(or as close to such amount as feasible) of the Prepaid Principal and
having a maturity date on (or as soon after as feasible) the applicable
Payment Date would earn if that Treasury Obligation were purchased in the
secondary market on the date the Prepaid Principal is paid to the Bank and
were held to maturity. Borrower agrees that the determination of Prepayment
Costs shall be based on amounts which a holder of a Treasury Obligation
could receive under these circumstances, whether or not the Bank actually
invests the Prepaid Principal in any Treasury Obligation. (5) BANK
CERTIFICATE. The Bank's certificate as to any amounts owing under this
paragraph shall be prima facia evidence of Borrower's obligation.
C. SET OFF: Every Account of Borrower with the Bank shall be subject to a lien
and to being set off against the Liabilities. The Bank may at any time at
its option and without notice, except as may be required by law, charge
and/or appropriate and apply all or any part of any such Account toward the
payment of any of the Liabilities.
D. EVENTS OF DEFAULT: The remainder of this paragraph D shall not apply if
this Note is payable on demand. Each of the following shall be an Event of
Default hereunder: (1) NONPAYMENT. (a) The nonpayment when due of any
part of the Liabilities; (b) the prohibition by any Law of payment of any
part of any of the Liabilities; (2) BANKRUPTCY; ADVERSE PROCEEDINGS. (a)
The occurrence of any Debtor Relief Action; (b) the appointment of a
receiver, trustee, committee, custodian, personal representative or similar
official for any Party or for any Material part of any Party's property;
(c) any action taken by any Party to authorize or consent to any action set
forth in subparagraph D(2)(a) or (b); (d) the rendering against any Party
of one or more judgments, orders, decrees and/or arbitration awards
(whether for the payment of money or injunctive or other relief) which in
the aggregate are Material to such Party, if they continue in effect for 30
days without being vacated, discharged, stayed, satisfied or performed; (e)
the issuance or filing of any warrant, process, order of attachment,
garnishment or other lien or levy against any Material part of any Party's
property; (f) the commencement of any proceeding under, or the use of any
of the provisions of any Law against any Material part of any Party's
property, including but not limited to any Law (i) relating to the
enforcement of judgments or (ii) providing for forfeiture to, or
condemnation, appropriation, seizure or taking possession by, or on order
of any Governmental Authority; (g) the forfeiture to, or the condemnation,
appropriation, seizure or taking possession by, or on the order of, any
Governmental Authority, of any Material part of any Party's property; (h)
any Party being charged with a crime by indictment, information or the
like. (3) NONCOMPLIANCE. (a) Any Default with respect to any Agreement with
or to the Bank, (b) the giving to the Bank by or on behalf of any Party at
any time of any materially incorrect or incomplete representation,
warranty, statement or information; (c) the failure of any Party to furnish
to the Bank, copies of its financial statements and such other information
respecting its business, properties, condition or operations, financial or
otherwise, promptly when, and in such form as, reasonably required or
requested by the Bank; (d) any Party's failure or refusal, upon reasonable
notice from the Bank, to permit the Bank's representative(s) to visit such
Party's premises during normal business hours and to examine and make
photographs, copies and extracts of such Party's property and of its books
and records; (e) any Party's concealing, removing or permitting to be
concealed or removed, any part of its property with the intent to hinder or
defraud any of its creditors; (f) any Party's making or suffering any
Transfer of any of its property, which Transfer is deemed fraudulent under
the law of any applicable jurisdiction; (g) the revocation or early
termination of any Party's obligations under any Agreement with or to the
Bank (including, but not limited to any of the Liabilities) or the
validity, binding effect or enforceability of any such obligations being
challenged or questioned, whether or not by the institution of proceedings.
(4) ADVERSE CHANGES. (a) the occurrence of a Material adverse change in any
Party's financial condition; (b) the death or incompetence (if a person) or
the dissolution or liquidation (if a corporation, partnership or other
entity) of any Party or such Party's failure to be and remain in good
standing and qualified to do business in each jurisdiction Material to such
Party; (c) any Material Default with respect to any Material Agreement
other than with or to the Bank; (d) any Default pursuant to which any
Person shall have the power to effect an Acceleration of any Material Debt;
(e) any Acceleration or demand of payment with respect to any Material
Debt; (f) any Party's becoming insolvent, as defined in the Uniform
Commercial Code; (g) the Bank's believing in good faith that the prospect
of payment of any of the Liabilities or of performance of any other
obligation of any Party to the Bank is impaired; (h) the Material
suspension of any Party's business; (i) any Party's Material failure to pay
any tax when due; (j) the expulsion of any Party from any exchange or self-
regulatory organization or any loss, suspension, nonrenewal or invalidity
of any Party's Material license, permit, franchise, patent, copyright,
trademark or the like; (k) the occurrence of any event which gives any
Person the right to assert a lien, levy or right of forfeiture against any
Material part of any Party's property; (l) Borrower's failure to give the
Bank notice, within 10 Business Days after Borrower had notice or
knowledge, of the occurrence of any event which, with the giving of notice
and/or lapse of time, would constitute an Event of Default. (5) BUSINESS
CHANGES. (a) any
change in Control of any Party; (b) any merger or consolidation involving
any Party; (c) any Party's sale or other Transfer or substantially all of
its property; (d) any bulk sale by any Party; (e) any Material change in
the nature or structure of any Party's business. (6) EXCHANGE CONTROLS. (a)
Any Party's failure to obtain any Exchange Control Permit deemed by the
Bank to be necessary or appropriate; (b) the failure to obtain the renewal
of any such Exchange Control Permit at least 30 days prior to its
expiration.
E. REMEDIES: (1) ACCELERATION AT BANK'S OPTION. Upon any failure to pay this
Note in full on demand (if payable on demand) or (if this Note is payable
other than on demand) upon the occurrence of any Event
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of Default other than any Debtor Relief Action, then any and all
Liabilities, not then due, shall, at the Bank's option, become immediately
due and payable without notice, which Borrower waives. (2) AUTOMATIC
ACCELERATION. Upon the occurrence of any Debtor Relief Action, then,
whether or not any of the Liabilities are payable upon demand and
notwithstanding paragraph F, any and all Liabilities, not then due, shall
automatically become immediately due and payable without notice or demand,
which Borrower waives. (3) Additional Remedies. The Bank shall have all
rights and remedies available to it under any applicable Agreement or Law.
F. WAIVER OF PROTEST, ETC.: Notice, presentment, protest, notice of dishonor
and except for such of the Liabilities as are payable on demand, but
subject to subparagraph E(2) demand for payment are hereby waived as to all
of the Liabilities.
G. PAYMENT: (1) MANNER. Any payment by other than immediately available funds
shall be subject to collection, interest shall continue to accrue until the
funds by which payment is made are available to the Bank. If and to the
extent any payment of any of the Liabilities is not made when due, the Bank
is authorized in its discretion to effect payment by charging any amount so
due against any Account of Borrower with the Bank without notice, except as
may be required by law, whether or not such charge creates an overdraft.
(2) Application. Any payment received by the Bank (including a deemed
payment under paragraph A, a set-off under paragraph C or a charge against
an Account under this paragraph G) shall be applied to pay any obligation
of indemnification (including but not limited to under paragraph B) and to
pay any other Liabilities (including interest thereon and the principal
thereof) in such order as the Bank shall elect in its discretion. Borrower
will continue to be liable for any deficiency. (3) PREPAYMENT. Borrower
shall be entitled to pay any outstanding principal amount or installment
under this Note on any Business Day prior to the applicable Payment Date
without the prior consent of the Bank provided that (a) any such payment
shall be together with payment of all Liabilities then due and all interest
accrued on the Prepaid Principal to the date of such payment, and (b) if
the Applicable Rate with respect to such Prepaid Principal is not a
Variable Prime-Based Rate, any such payment shall be on not less than 5
Business Day's notice to the Bank and shall be accompanied by any amount
required pursuant to subparagraph B(4). Any such payment shall, unless
otherwise consented to by the Bank, be applied pro rata to the last
outstanding principal amount(s) to become due under this Note in inverse
order of maturity. (4) NON-BUSINESS DAYS. If any payment of any of the
Liabilities is due on any day that is not a Business Day, it shall be
payable on the next Business Day. The additional day(s) shall be included
in the compilation of interest. (5) EXTENSION AT BANK'S OPTION. The Bank
shall have the option, which may be exercise one or more times by notice(s)
to Borrower, to extend the date on which any amount is payable hereunder to
one or more subsequent date(s) set forth in such notice(s).
H. PARTIES; NO TRANSFER BY BORROWER: If Borrower is more than one Person,
all of them shall be jointly and severally liable under the Note. The
obligations under this Note shall continue in force and shall apply
notwithstanding any change in the membership of any partnership executing
this Note, whether arising from the death or retirement of one or more
partners or the accession of one or more new partners. Without the Bank's
written consent, Borrower shall have no right to make any Transfer of any
of the Liabilities, any such purported Transfer shall be void. Subject to
the foregoing, the provisions of this Note shall be binding on Borrower's
executors, administrators, successors and assigns.
I. BANK TRANSFERS: (1) TRANSFERABILITY. Without limiting the Bank's rights
hereunder, the Bank may make a Transfer of all or any part of (a) any
obligation of Borrower to the Bank (including but not limited to any of the
Liabilities); (b) any obligation of any other Party in connection with any
of the Liabilities; (c) any Agreement of any Party in connection with any
of the Liabilities; (d) any collateral, mortgage, lien or security
interest, however denominated, securing any of the Liabilities; and/or (e)
the Bank's rights and, if any, obligations with respect to any of the
foregoing. (2) EXTENT OF TRANSFER. In the event the Bank shall make any
Transfer of any of the foregoing items ("Transferred Items"), then - to the
extent provided by the Bank with respect to such Transfer, the Transferee
shall have the rights, powers, privileges and remedies of the Bank. The
Bank shall thereafter, to the extent of such Transfer, be forever relieved
and fully discharged from all liability or responsibility, if any, that it
may have to any Person with respect thereto, except for claims, if any,
arising prior to or upon such Transfer. The Bank shall retain all its
rights and powers with respect to any Transferred items to the extent that
it has not made a Transfer thereof. Without limiting the foregoing, to the
extent of any such Transfer, paragraph B (indemnification) shall apply to
any Taxes, Regulatory Costs, Costs and Expenses and Prepayment Costs of, or
incurred by, any Transferee, and paragraphs C (Set-Off) and G(1) (Payment-
Manner) shall apply to any Account of Borrower with any Transferee. (3)
DISCLOSURES. The Bank is authorized to disclose to any prospective or
actual Transferee any information that the Bank may have or acquire about
Borrower and any information about any other Person submitted to the Bank
by or on behalf of Borrower. (4) NEGOTIABILITY DEFENSES WAIVED. IF THIS
NOTE IS NOT A NEGOTIABLE INSTRUMENT, BORROWER WAIVES ALL DEFENSES (EXCEPT
SUCH DEFENSES AS MAY BE ASSERTED AGAINST A HOLDER IN DUE COURSE OF A
NEGOTIABLE INSTRUMENT) WHICH BORROWER MAY HAVE OR ACQUIRE AGAINST ANY
TRANSFEREE WHO TAKES THIS NOTE, OR ANY COMPLETE OR PARTIAL INTEREST IN IT,
FOR VALUE, IN GOOD FAITH AND WITHOUT NOTICE THAT IT IS OVERDUE OR HAS BEEN
DISHONORED OR OF ANY DEFENSE AGAINST OR CLAIM TO IT ON THE PART OF ANY
PERSON.
J. NO ORAL CHANGES; NO WAIVER BY THE BANK; PARTIAL UNENFORCEABILITY. This Note
may not be changed orally. Neither a waiver by the Bank of any of its
options, powers or rights in one or more instances, nor any delay on the
part of the Bank in exercising any of them, nor any partial or single
exercise thereof, shall constitute a waiver thereof in any other instance.
Any provision of this Note which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or non-
authorization, without invalidating the remaining provisions of the Note in
that or any other jurisdiction and without affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
K. DISPUTES AND LITIGATION: (1) GOVERNING LAW. This Note and the rights and
obligations of the Bank and Borrower hereunder shall be governed by the
internal laws of the State of New York without giving effect to conflict of
laws principles. (2) JURISDICTION, VENUES AND SERVICE OF PROCESS. Borrower
submits to the nonexclusive jurisdiction of the federal and state courts in
the State of New York in New York County with respect to any dispute that
may be made on Borrower by personal deliver at, or by mail addressed to,
any address to which the Bank is authorized to address notices to Borrower.
(3) WAIVER OF DEFENSES, SETOFFS, COUNTERCLAIMS AND
CERTAIN DAMAGES. Borrower waives the right to assert any defense, setoff or
counterclaim in any proceeding relating in any way to this Note or any
transaction contemplated hereby. The Bank shall not have any liability for
negligence,
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except solely to the extent required by law and not disclaimable, and
except for its own gross negligence or willful misconduct. In any event,
the Bank shall not have any liability for any special, consequential or
punitive damages. (4) SOVEREIGN IMMUNITY. Borrower irrevocably waives, with
respect to itself and its property, any sovereign immunity that it may have
or hereafter acquire, including but not limited to immunity from the
jurisdiction of any court, from any legal process, from attachment prior to
judgment, from attachment in aid of execution, from execution or otherwise.
L. NOTICE. Any notice in connection with any of the Liabilities shall be in
writing and may be delivered personally or by cable, telex, telecopy or
other electronic means of communication, or by certified mail, return
receipt requested, addressed (a) to Borrower as set forth herein or to any
other address that the Bank believes to be Borrower's address, and (b) to
the Bank at Bank Hapoalim B.M., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention Legal Department. Any such notices shall be addressed
to such other address(es) as may be designated in writing hereafter. All
such notices shall be deemed given when delivered personally or
electronically or when mailed, except notice of change of address, which
shall be deemed to have been given when received.
M. DEFINITIONS. The following definitions apply in this Note: (1)
ACCELERATION. Any acceleration of payment of requirement of prepayment of
any Debt, or any Debt's becoming due and payable prior to stated maturity.
(2) ACCOUNT: (a) the balance of any account of Borrower with any Person,
(b) any claim of Borrower against any Person and/or (c) any property in the
possession or custody of, or in transit to, any Person, whether for
safekeeping, collection, pledge or otherwise, as to which Borrower has any
right, power or interest, in each case whether existing now or hereafter,
in any jurisdiction worldwide, and whether or not disconnected in the same
currency as any of the Liabilities. (3) AGREEMENT. Any agreement or
instrument (including but not limited to this Note), no matter when made,
under which any Party is obligated to any Person. (4) APPLICABLE RATE.
Whichever of the Loan Rate or Increased Rate is the applicable interest
rate at any time. (5) BANK: Bank Hapoalim B.M. (6) BORROWER. The Person(s)
executing this Note at paragraph 9 or any one or more of them. "Borrower"
may refer to one or more Persons. (7) BUSINESS DAY. Any day on which both
(a) banks are regularly open for business in New York City and (b) the
Office is open for ordinary business in the Bank's discretion, the Office
may be closed on any Saturday, Sunday, legal holiday or other day on which
it is lawfully permitted to close. (8) CONTROL. The power, alone or in
conjunction with others, directly or indirectly, through voting securities,
by contract or otherwise, to direct or cause the direction of a Person's
management and policies. (9) COSTS AND EXPENSES. Any and all reasonable
costs and expenses (including but not limited to attorneys' fees and
disbursements) incurred in connection with the Borrower and/or the
Liabilities, including but not limited to those for (a) any action taken,
whether or not by litigation, to collect, or to protect rights or interests
with respect to, or to preserve any collateral securing, any of the
Liabilities; (b) compliance with any legal process or any order or
directive of any Governmental Authority with respect to any party; (c) any
litigation or administrative proceeding relating to any Party and/or (d)
any amendment, modification, extension or waiver with respect to any of the
Liabilities. (10) DEBT. Any Party's obligation of any sort (in whole or in
part for the payment of money to any Person, whether (a) absolute or
contingent, (b) secured or unsecured, (c) joint, several or independent,
(d) nor or hereafter existing, or (e) due or to become due.
(11) DEBTOR RELIEF ACTION. The commencement by any Party or (unless
dismissed or terminated within 30 days) against any Party of any proceeding
under any law of any jurisdiction (domestic or foreign) relating to
bankruptcy, reorganization, insolvency, arrangement, composition,
receivership, liquidation, dissolution, moratorium or other relief of
financially distressed debtors, or the making by any Party of any
assignment for the benefit of creditors. (12) DEFAULT. Any breach, default
or event of default under, or any failure to comply with, any provision of
any Agreement. (13) EVENT OF DEFAULT. Any event set forth in paragraph D.
(14) EXCHANGE CONTROL PERMIT. Any permit or license issued by a
Governmental Authority outside the United States under which any Party is
permitted (a) to incur and pay any of the Liabilities in the United States
in any currency(ies) in which denominated or (b) to enter into, incur and,
or perform any other obligation or Agreement. (15) GOVERNMENTAL AUTHORITY.
Any domestic or foreign, national or local (a) government, (b)
governmental, quasi-governmental or regulatory agency or authority, (c)
court or (d) central bank or other monetary authority. (16) INCREASED RATE.
(a) If the Loan Rate is a Variable Prime-Based Rate, the Increased Rate
with respect to the entire outstanding principal balance shall be the Loan
Rate plus 2% per year; (b) if the Loan Rate is not a Variable Prime-Based
Rate, the Increased Rate with respect to any amount of principal or
installment shall be (i) the Loan Rate plus 2% per year prior to the
applicable Payment Date and (ii) the Prime Rate plus 4% per year on or
subsequent to the applicable Payment Date. (17) LAW. Any treaty, law,
regulation, rule, Judgment, order, decree, guideline, interpretation or
request (whether or not having the force of law) issued by any Governmental
Authority. (18) LIABILITIES. (a) any and all of the Debt evidenced by this
Note, and any and all other Debt of Borrower to, or held or to be held by,
the Bank in any jurisdiction worldwide for its own account or as agent for
another or others, whether created directly or acquired by Transfer or
otherwise, and (b) any and all obligations of any other Party with respect
to any of such Debt. (19) LOAN RATE. The interest rate determined under
paragraph 2. (20) MATERIAL. Material to the business or financial condition
of any Party on a consolidated or consolidating basis. (21) OFFICE. The
Bank's office at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
such other place as the Bank may specify by notice. (22) PARTY. (a)
borrower; (b) any maker co-maker or endorser or any Agreement evidencing or
any guarantor surety, accommodation party or indemnitor with respect to, or
any Person that provides any collateral as security for, or any Person that
issues a subordination, comfort letter, standby letter of credit,
repurchase agreement, put agreement, option, other Agreement or other
credit support with respect to any of the Liabilities; (c) if any Party is
a partnership or joint venture, any general partner or joint venturer in
such Party, and (d) any Person (i) that is under the Control of any Party
and (ii) whose business or financial condition is Material to such Party.
(23) PAYMENT DATE. Any Business Day on which any part of the principal or
any installment of this Note becomes due and payable under paragraph 1 (and
not on account of an Acceleration). (24) PERSON. Any person, partnership,
joint venture, company, corporation, uncorporated organization or
association, trust, estate, Governmental Authority, or any other entity.
(25) PREPAID PRINCIPAL. Any amount of principal or any installment of this
Note which Borrower pays prior to the applicable Payment Date for such
amount. (26) PREPAYMENT COSTS. All losses, costs and expenses incurred as a
result of receiving Prepaid Principal and of reinvesting it at rate(s)
which may be less than the Applicable Rate
4
for such Prepaid Principal. (27) PRIME RATE. The Bank's New York Branch's
stated Prime Rate as reflected in the books and records as such Prime Rate
may change from time to time. The Bank's determination of its Prime Rate
shall be conclusive and final. The Prime Rate is a reference rate and not
necessarily the lowest interest rate charged by the Bank. (28) REGULATORY
COSTS. Any and all costs and expenses of complying with any Law, including
but not limited to with respect to (a) any reserves or
special deposits maintained for or with, or pledges to, any Governmental
Authority, or (b) any capital, capital equivalency ledger account, ratio of
assets to liabilities, risk-based capital assessment or any other capital
substitute, risk-based or otherwise. (29) Taxes. Any and all present and
future taxes, levies, imposts, deductions, charges and withholdings in any
jurisdiction worldwide, and all liabilities with respect thereto, which are
imposed with respect to this Note or to any amount payable under this Note,
excluding taxes determined on the basis of the net income of a Person or of
any of its offices. (30) TRANSFER. Any negotiation, assignment,
participation, conveyance, grant of a security interest, lease, delegation,
or any other direct or indirect transfer of a complete or partial, legal,
beneficial, economic or other interest or obligation. (31) TRANSFEREE. Any
Person to whom a Transfer is made. (32) TRANSFERRED ITEMS. Items defined in
paragraph I. (33) TREASURY OBLIGATIONS. A note, xxxx or bond issued by the
United States Treasury Department as a full faith and credit general
obligation of the United States. (34) VARIABLE PRIME-BASED RATE. Any
Applicable Rate which is determined based on the Prime Rate. Any such rate
shall change automatically when and as the Prime Rate changes.
5
Multiple-Loan Rider to Promissory Note
(Libor-Based Rate)
This Rider is referred to in paragraph 2(c) of, and constitutes a part of, a
note of Borrower to the Bank dated October 11, 2000.
================================================================================
SPECIFIC TERMS
(a) Margin: 1.00% per year
(b) Interest Period: (__) _________ days [x] 1, 2 or 3 months and [x] as
agreed from time to time
(c) Minimum Draw Amount: U.S. ___________________ [ ] None
(d) Minimum Multiple Amount: U.S. $
---------------- [ ] None
================================================================================
Borrower agrees to the above Specific Terms and to all of the Terms and
Conditioning set forth below.
Print Borrower's Name: Level 8 Systems, Inc.
------------------------------------------------------
(Signature) By: /s/ Xxxxx X.Xxxx (Signature) By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------ ----------------------
Print Name and Xxxxx X. Xxxx, Print Name and Xxxxxx Xxxxxxxxxxx,
Title Chief Financial Officer Title President
TERMS AND CONDITIONS
Certain capitalized terms are defined in paragraph 4.
1. Advances. Borrower may receive a Loan in any principal amount upon
Borrower's request to the Bank and the Bank's agreement thereto, subject to
all of the following conditions:
(a) Agreement of the Bank and Borrower. Subject to subparagraphs 1(b),
1(c) and 2(b), the Bank and Borrower shall have agreed, not later than
the Determination Time, with respect to the Loan's (i) principal
amount, (ii) LIBOR-Base Rate and (iii) Interest Period; provided,
however, that if the Bank determines that by such Determination Time,
Borrower has failed or declined to agree on the LIBOR-Based Rate
and/or Interest Period with respect to such Outstanding Principal
Amount, then interest on such Outstanding Principal Amount shall
accrue at the LIBOR-Based Rate without the agreement of Borrower, and
the Interest Period shall be of the same duration as
the Interest Period just ended with respect to such Outstanding
Principal Amount or, if there was no such prior Interest Period, one
month.
(b) Applicable limitations. (i) The applicable Payment Date shall not be
later than the Due Date; (ii) the total of the Outstanding Principal
Amounts of all Loans shall not exceed the principal amount set forth
in the Note; (iii) the principal amount of any single Loan request
shall be not less than any Minimum Draw Amount set forth under
Specific Terms; and (iv) the principal amount of any single Loan
request shall be an integral multiple of any Minimum Multiple Amount
set forth under Specific Terms.
(c) Borrower's request and agreement. Borrower's request for a Loan and
Borrower's agreement to the terms thereof shall be communicated to the
Bank in any form that is acceptable in each instance to the Bank in
its sole discretion, which may include telephone, telex, telecopy or a
writing executed by Borrower. Borrower shall have provided the Bank
with documentation, satisfactory in form and substance to the Bank in
its sole discretion, confirming the authority of the person(s)
agreeing to such terms on behalf of Borrower.
2. Payment of Principal and Interest. Subject to the other provisions of the
Note:
(a) Obligation and Time of Repayment. Each Outstanding Principal Amount
shall be due and payable at the applicable Payment Date.
(b) Loan Rate. Interest on any Outstanding Principal Amount shall accrue
at the LIBOR-Based Rate; provided, however, that if the Bank
determines (i) that by the Determination Time (A) by reason of
circumstances affecting the London Interbank Market generally,
adequate and fair means do not exist for ascertaining an applicable
LIBOR rate or it is impractical for the Bank to fund or continue to
fund the Outstanding Principal Amount during the applicable Interest
Period, or (B) quotes for funds in United States Dollars in sufficient
amounts comparable to the relevant Outstanding Principal Amount and
for the duration of the applicable Interest Period would not be
available to the Bank in the London Interbank Market, or (C) quotes
for funds in United States Dollars in the London Interbank Market will
not accurately reflect the cost to the Bank of making a Loan or of
funding the relevant Outstanding Principal Amount during the
applicable Interest Period, or (ii) that at any time the making or
funding of loans, or charging of interest at rates, based on LIBOR
shall be unlawful or unenforceable for any reason, then as long as
such circumstance(s) shall continue, interest on the relevant
Outstanding Principal Amount shall accrue at the Alternate Rate.
(c) Payment and Calculation of Interest. Interest shall be payable (i) at
each Payment Date or (whenever the Applicable Rate is a variable
Prime-Based Rate) monthly, (ii) at the Due Date and (iii) at any time
that any Outstanding Principal Amount or part thereof is paid.
Interest shall be calculated as set forth in the Note.
3. Bank's Conclusive Determinations and Schedule. The Bank's determination
with respect to any matter hereunder shall be conclusive, final and binding
on Borrower, absent manifest
2
error. The Bank shall from time to time record the date and amount of each
Loan, the Applicable Rate, each date on which any part of principal,
interest or any other amount shall be due and payable, and the amount and
date of each payment of principal, interest or any other amount, on a
schedule, which in the Bank's discretion may be computer-generated, and
which is incorporated in, and is a part of, the Note and this Rider (the
"Schedule"). The Schedule shall be conclusive, final and binding upon
Borrower, absent manifest error; provided, however, that the failure of the
Bank to record any of the foregoing shall not limit or otherwise affect the
obligation of Borrower to pay all amounts owed to the Bank under the Note.
Without limiting the foregoing, Borrower acknowledges that the Interest
Period and the Applicable Rate with respect to any Outstanding Principal
Amount are subject to the Bank's consent ordinarily negotiated between
Borrower and the Bank by telephone, and Borrower agrees that in the event
of any dispute as to any of the terms of any Loan, the determination of the
Bank and its respective entry with respect thereto on its books and records
and/or on the Schedule shall be conclusive, final and binding on Borrower,
absent manifest error.
4. Definitions. Each capitalized term not defined herein shall have the
meaning ascribed thereto in the Note. The following definitions apply in
this Rider and in the Note, and shall prevail over any different
definitions in the Note.
(a) Alternate Rate: an annual Variable Prime-Based Rate equal to the Prime
Rate plus the Margin.
(b) Applicable Rate: whichever of the Loan Rate or Increased Rate is the
applicable interest rate at any time with respect to any Outstanding
Principal Amount.
(c) Determination Time: 12:00 noon (or any later time determined by the
Bank in its sole discretion), New York City time, of a Working Day
that is three Working Days prior to the date of the Loan.
(d) Due Date: the date set forth in paragraph 1(b) of the Note or, if the
Bank has extended such date pursuant to paragraph G(5) of the Note or
by an agreement with Borrower, such extended date.
(e) Interest Period: any term of 1 day, 1 week, 1 to 6, 9 or 12 months, or
such other term as may be acceptable to the Bank in its discretion, as
set forth above under Specific Terms or, if not so set forth, as
selected or agreed to by the Bank in its discretion. A term shall not
be considered as "Interest Period" during any period that the
Applicable Rate is a Variable Prime-Based Rate. Each Interest Period
shall commence immediately at the end of the preceding Interest
Period, if any; if there had been no immediately preceding Interest
Period with respect to any Outstanding Principal Amount, the Interest
Period shall commence on the first Business Day on which (i) such
amount shall be outstanding and (ii) the Applicable Rate is not a
Variable Prime-Based Rate. If any Interest Period would otherwise come
to an end on a day which is not a Working Day, its termination shall
be postponed to the next day that is a Working Day unless it would
thereby terminate in the next calendar month. In such
3
case, such Interest Period shall terminate on the immediately
preceding Working Day.
(f) LIBOR: the rate or rates established by the New York Branch of the
Bank two Working Days prior to the date of the Loan, by applying the
following: (i) the British Bankers Association ("BBA") Interest
Settlement Rates for U.S. Dollars, as defined in the BBA official
definitions and reflected on the Telerate BBA pages, for the
applicable amounts and interest periods, which rates reflect the
offered rates at which deposits are being quoted to prime banks in the
London Interbank Market at 11:00 A.M. London Time calculated as set
forth in said BBA official definition; or (ii) such other recognized
source of London Eurodollar deposit rates as the Bank may determine
from time-to-time. In the event the applicable BBA page or pages shall
be replaced by another Telerate page or other Telerate pages for
quoting London Eurocurrency rates, then rates quoted on said
replacement page or pages shall be applied. If the Bank determines
that London Eurocurrency rates are no longer being quoted (temporarily
or permanently) on any Telerate pages or that Telerate is no longer
functioning (temporarily or permanently) in substantially the same
manner as on the date hereof, then the Bank shall notify the Borrower
of a substitute, publicly available reference for the determination of
LIBOR. If the Bank determines in its sole discretion that LIBOR cannot
be determined or does not represent its effective cost of maintaining
Loans under this Note, then interest shall accrue at the effective
cost to the Bank to maintain the Loans (as determined by the Bank in
its sole discretion).
(g) LIBOR-Based Rate: an annual rate equal to LIBOR plus the Margin, as
determined by the Bank.
(h) Loan: (i) any loan advanced by the Bank to the Borrower under the
Note; (ii) any rollover by the Bank of any such loan that is otherwise
due and payable or (iii) any conversion of the Applicable Rate for any
Outstanding Principal Amount from a rate that is a Variable Prime-
Based Rate to one that is not, or vice versa.
(i) Loan Rate: the interest rate determined under subparagraph 1(a) and/or
2(b).
(j) Margin: as set forth under Specific Terms or, if not so set forth, 2%
per year.
(k) Note: the note of which this Rider is a part (including any and all
riders and amendments to the Note).
(l) Outstanding Principal Amount: the outstanding principal amount of each
Loan.
(m) Payment Date: the last Business Day of the applicable Interest Period
or, if the applicable Loan Rate is a Variable Prime-Based Rate, the
Due Date.
(n) Working Day: a Business Day on which banks are regularly open for
business in London.
4
