EXHIBIT 10.24
PROMISSORY NOTE
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Borrower: KORN/FERRY INTERNATIONAL; ET, AL Lender: 1st Business Bank
0000 XXXXXXX XXXX XXXX, XXXXX 000 Xxxxxxxxxxxx
XXX XXXXXXX, XX 00000 601 West Fifth St.
AND XXXXXXX X. XXXXXXXXX Xxx Xxxxxxx, Xx 00000
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Principal Amount: $1,000,000.00 Initial Rate: 8.000% Date of Note: January
28, 1998
PROMISE TO PAY. KORN/FERRY INTERNATIONAL and XXXXXXX X. XXXXXXXXX (referred to
in this Note individually and collectively as "Borrower") jointly and severally
promise to pay to 1st Business Bank ("Lender"), or order, in lawful money of the
United States of America, the principal amount of One Million and 00/100 Dollars
($1,000,000.00), with interest on the unpaid principal balance from January 28,
1998, until paid in full.
PAYMENT. Borrower will pay this loan in one principal payment of $1,000,000.00
plus interest on January 15, 1999. This payment due January 15, 1999, will be
for all principal and accrued interest not yet paid. In addition, Borrower will
pay, monthly, interest, beginning February 15, 1998, with all subsequent
interest payments to be due on the same day of each month after that. 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 any unpaid collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
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 1st Business Bank
Reference Rate (the "Reference Rate"). Any change in the interest rate
resulting from a change in the Reference Rate shall be effective on and as of
the date of such change. Lender will tell Borrower the current Reference Rate
upon Borrower's request. Borrower understands that Lender may make loans based
on other rates as well. The Reference Rate currently is 8.500% per annum. The
interest rate to be applied to the unpaid principal balance of this Note will be
at a rate of 0.500 percentage points under the Reference Rate, resulting in an
initial rate of 8.000% per annum. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable
law. (*) INITIAL: MDB NAG
PREPAYMENT. 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. (**) INITIAL:MDB / NAG
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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. (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. (e) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest. This includes a garnishment
of any of Borrower's accounts with Lender. (f) Any guarantor dies or any of the
other events described in this default section occurs with respect to any
guarantor of this Note. (g) Lender in good xxxxx xxxxx itself insecure.
ADDITIONAL DEFAULT PROVISION. BORROWER WILL ALSO BE IN DEFAULT IF ANY OF THE
FOLLOWING HAPPENS: BORROWER'S FAILURE TO SUBMIT FINANCIAL STATEMENTS, TAX
RETURNS AND SUCH OTHER FINANCIAL INFORMATION TO THE HOLDER HEREOF WHEN
REQUESTED; THE OCCURENCE OF AN EVENT WHICH CAUSES A MATERIAL ADVERSE CHANGE IN
BORROWER'S FINANCIAL CONDITION; THE GOOD FAITH BELIEF BY LENDER THAT THERE
EXISTS, OR THE ACTUAL EXISTENCE OF, ANY DETERIORATION OF BORROWER'S ABILITY TO
MEET BORROWER'S OBLIGATIONS TO LENDER OR TO BORROWER'S OTHER CREDITORS OR IN THE
VALUE OF ANY COLLATERAL SECURING THE OBLIGATIONS OF THE UNDERSIGNED HEREUNDER;
BORROWER CEASES TO EXIST OR ANY GENERAL PARTNER IN BORROWER CEASES TO EXIST OR
IS NO LONGER A GENERAL PARTNER IN BORROWER.
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 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 all costs and expenses of collection.
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-judgment 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.
Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the
other. This Note shall be governed by and construed in accordance with the laws
of the State of California.
(*) VARIABLE INTEREST RATE (CONTINUED). The interest rate on advances made under
this Note will be based on changes in an index which is the 1st Business Bank
Reference Rate, as described above, or LIBOR, as described to the attached
"Addendum to Promissory Note" which is incorporated herein by this reference as
though fully set forth. INITIAL: MDB / NAG.
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(**) PREPAYMENT (CONTINUED). Notwithstanding the preceding regarding allowance
of prepayment without penalty, all advances requested by Borrower to bear the
LIBOR rate option shall have the term fixed for the LIBOR rate chosen and shall
not be repaid earlier than due. INITIAL MDB / NAG.
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GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Each Borrower understands and
agrees that, with or without notice to Borrower, Lender may with respect to any
other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the order or
manner of sale thereof, including without limitation, any nonjudicial sale
permitted by the terms of the controlling security agreements, as Lender in its
discretion may determine; (e) release, substitute, agree not to xxx, or deal
with any one or more of Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; and (f) determine how, when and
what application of payments and credits shall be made on any other indebtedness
owing by such other borrower. 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 the 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) the 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. The obligations under this
Note are joint and several.
PROMISSORY NOTE PAGE 2
Loan No (Continued)
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PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS AND THE ATTACHED
NOTICE TO COSIGNER. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
KORN/FERRY INTERNATIONAL
By:/s/Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX, TREASURER
X /s/ M. D. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX, Co-Borrower
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ADDENDUM TO PROMISSORY NOTE
This Addendum to Promissory Note (this "Addendum") is made this 28th day of
January, 1998, and is attached to and incorporated into, and shall be deemed to
be a part of, that certain Promissory Note (the "Note") of even date herewith,
executed by XXXXXXX X. XXXXXXXXX AND XXXX/FERRY INTERNATIONAL ("Borrower") to
and in favor of 1st Business Bank, a California banking corporation ("Bank"), to
wit:
Except as otherwise herein expressly defined, all terms herein beginning
with a capital letter shall have the meanings ascribed to them in the Note. The
Note is hereby modified in the following respects only:
1. Definitions
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As used in this Addendum, the following definitions shall apply:
1.1 "LIBOR" means the London Interbank Offered Rate for U.S. Dollar
deposits in the London bank deposit market for one (1), three (3) or six (6)
month contracts based on current quotations at major banks, as determined and
reported from time to time by The Wall Street Journal, Western Edition, Money
Rates column. For purposes of this Addendum, all such rates shall be deemed to
be effective on the date so published, without regard to the effective date of
reported quotations.
1.2 "LIBOR Rate" means the per annum rate of interest in effect from
time to time, applicable to a particular advance under the Note upon Borrower's
election to be charged interest thereon based on LIBOR. The LIBOR rate for a
particular advance shall be one and one-half percentage points (1.50%) above
LIBOR applicable to the corresponding Rate period selected by Borrower. The
LIBOR Rate for a particular advance shall be fixed at the beginning of the
corresponding Rate Period selected by Borrower and shall continue to accrue and
be payable at the same rate until said Rate Period expires.
1.3 "Rate Period" means a period of time during which interest shall
accrue at a LIBOR Rate. Borrower may select Rate Periods of one, three or six
months, but not extending beyond the maturity date provided in the Note.
2. Interest Rate; LIBOR Election.
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2.1 Initial Rate and Election.
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The LIBOR Rate accruing under the Note during the initial Rate
Period shall be LIBOR plus 1.50%. Commencing on the first day of each Rate
Period following the initial Rate Period, interest accruing on the Note shall be
adjusted to be the LIBOR Rate in effect during such Rate Period as herein
provided, subject to further adjustment upon the occurrence of a default as
provided in the Note. From time to time, and provided Borrower is not in default
under the Note, Borrower may, if expressly permitted by the provisions of the
Note, request additional advances, provided the aggregate amount of the initial
advance and all additional advances shall not exceed the total principal amount
of the Note as therein stated, and to elect to be charged interest on any or
all such advances at the LIBOR Rate applicable to the corresponding Rate Period
then selected by Borrower with respect to each such advance.
2.2 Procedure for Electing LIBOR
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Borrower's election to be charged interest at the LIBOR Rate with
respect to a particular advance, or to renew one or more LIBOR Rates with
respect to outstanding unpaid advances under the Note at the same or different
Rate Periods as may be permitted by this Addendum, shall be made, if at all, by
Borrower's requesting a LIBOR Rate or Rate Periods, as follows: Each such
request may be made by Borrower in writing or by telephone call to an officer of
Bank assigned to the office of Bank at which payments are required to be made
under this Note. In response to Borrower's request, Bank may provide an
indicative rate quote of LIBOR for a Rate Period selected by Borrower;
provided, however, that Borrower may not select a Rate Period which extends
beyond the maturity date set forth in the Note. Borrower's election shall be
irrevocable, whether it is made in writing or otherwise. If Bank so chooses,
Bank may confirm any election by Borrower with respect to each LIBOR Rate and
the corresponding Rate Period in the form of a written notice thereof, and
Borrower shall have a period of three business days from the date Borrower
receives Bank's written confirmation within which to notify Bank of any error by
Bank in its notice confirming the LIBOR Rate election and corresponding Rate
Period. If Bank fails to send any such written confirmation, or if Borrower
fails to deliver written notice to Bank of any such error by Bank within said
time period, then any such failure shall not effect the LIBOR Rate or
corresponding Rate Period established by Bank pursuant to Borrower's election.
3. Reference Rate.
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If Borrower fails to elect a LIBOR Rate at any time Borrower requests
an advance under the Note, or fails to select a new or renewal Rate Period prior
to the expiration of a Rate Period applicable to a particular advance, or if
Borrower fails to designate a Rate Period applicable to any LIBOR Rate election,
the rate of interest applicable to the loan advance as to which such failure
occurs shall automatically revert to a per annum variable rate of interest equal
to the Reference Rate (as defined in the Note) in effect from time to time. With
respect to any advance then accruing interest at a LIBOR Rate, the Reference
Rate will begin to accrue as of the expiration of any Rate Period then or
therefore expiring, and continuing until Borrower makes a valid election for a
new LIBOR Rate and Rate Period, at which time the interest rate due under the
Note with respect to such advance shall be based on the LIBOR Rate in effect at
the time of Borrower's election as hereinabove provided for the corresponding
Rate Period.
Except as herein otherwise expressly provided, the Note has not been
otherwise modified and remains in full force and effect.
("Borrower")
KORN/FERRY INTERNATIONAL
By: /s/ Xxxxxx X Xxxxx
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XXXXXX X. XXXXX, TREASURER
X /s/ M. D. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX, CO-BORROWER
