REVOLVING CREDIT PROMISSORY
NOTE
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$50,000.00
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March 26, 2009
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FOR VALUE
RECEIVED, CDSI Holdings Inc., a Delaware corporation (the
“Borrower”) hereby unconditionally promises to pay to
the order of Vector Group Ltd., having an office at 100 S.E.
Second Street, 32nd Floor, Miami, Florida 33131 (the
“Lender”), on December 31, 2012, or such later
date as requested by Borrower and agreed to in writing by the
Lender in its sole discretion (the “Maturity Date”),
the principal sum of Fifty Thousand Dollars ($50,000.00) (the
“Commitment Amount”) or such lesser amount as may be
outstanding under this Revolving Credit Promissory Note (the
“Note”), together with accrued unpaid interest as set
forth herein.
1.1 Subject to the
terms hereof, the Lender may, in its sole discretion, agree to make
advances (each an “Advance”) to the Borrower upon the
Borrower’s request in an aggregate amount not to exceed Fifty
Thousand dollars ($50,000.00) or such lesser amounts that when
combined, shall not exceed the Commitment Amount. The Borrower
acknowledges and agrees that the Lender has no obligation of any
kind to make any Advance and may elect at any time and without
cause to not make any Advances. The Borrower and the Lender shall
agree upon mutually acceptable borrowing notice
procedures.
1.2 The
Lender’s records of all Advances and payments made hereunder
shall, absent manifest error, be binding on the Borrower for all
purposes.
1.3 Principal
amounts repaid or prepaid hereunder, subject to the terms hereof,
may be reborrowed.
2.
Interest; Net Payments .
2.1 All loans
outstanding hereunder shall bear interest, upon any net balance
outstanding at the close of each day, which interest will be
payable by the Borrower in arrears, on the Maturity Date, until the
principal is paid in full pursuant to the terms hereof, at a rate
of interest (calculated on a year of 360 days) equal to eleven
percent (11%) per annum; provided , however , that if
the Borrower does not pay the outstanding principal and interest
due and owing by the Maturity Date, such amount(s) shall
automatically be compounded at the Default Rate (defined below).
Principal shall be repaid in full on the Maturity Date or upon such
earlier date upon which demand therefor is made by the Lender;
provided however , that two (2) days advance notice of
any such demand is given to the Borrower.
2.2 Any amounts
outstanding on the earliest of (i) the occurrence of an Event
of Default and the passage of any applicable cure period or
(ii) the Maturity Date, to the extent permitted by applicable
law, shall accrue interest at sixteen percent (16%) per annum
(calculated on a year of 360 days) compounded quarterly (the
“Default Rate”).
2.3 All payments
hereunder shall be made to the account specified by the Lender to
the Borrower in immediately available funds in United States
Dollars without setoff, defense or counterclaim or withholding on
account of taxes, levies, duties or any other deduction whatsoever.
Whenever any payment to be made hereunder shall be otherwise due on
a day which is not a business day, such payment shall be made on
the next succeeding business day, unless such date falls into the
next calendar month (in which case payment is to be made on the
preceding date) and such extension of time shall in such case be
included in the computation of interest.
3.
Representations and Warranties; Covenants
.
3.1 As an
inducement for the Lender to make Advances hereunder, the Borrower
hereby represents, warrants and covenants that on the closing date
and at the time of each Advance that:
(a) it
is a Delaware corporation duly organized, validly existing and in
good standing;
(b) it
has the authority and has taken all necessary action in order to
execute and deliver this Note and to perform the terms and
provisions set forth herein;
(c) the
Borrower’s obligations under this Note are legal, valid and
binding and enforceable against the Borrower in accordance with
their terms, except as such enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditor’s rights in general;
(d) the
Borrower shall provide the Lender with such financial information
regarding the Borrower, its affiliates and their respective
business operations as the Lender may from time to time
request;
(e) without
the prior consent of the Lender, the Borrower shall not amend its
governing documents in any manner that would be adverse to the
Lender;
(f) without
the prior consent of the Lender, the Borrower shall not directly or
indirectly incur any indebtedness for borrowed money (or similar
liability); and
(g) without
the prior consent of the Lender, the Borrower shall not directly or
indirectly encumber, pledge, hypothecate or charge, any of its
assets or properties or sell all or substantially all of its assets
or properties.
4.
Intentionally Omitted.
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