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EXHIBIT 10 v
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
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$1,338,000.00 05-28-1999 05-27-2000 4652100 500 12 4580 WTF
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References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
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Borrower: Global Election Systems, Inc. (TIN: ▇▇▇▇▇▇▇▇▇) Lender: WESTERN BANK
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇ 505 Marquette NW
P O Box 26144
Albuquerque, NM 87125
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Principal Amount: $1,338,000.00 Initial Rate: 9.750% Date of Note: May 28, 1999
PROMISE TO PAY. Global Election Systems, Inc. ("Borrower") promises to pay to
WESTERN BANK ("Lender",), or order, in lawful money of the United States of
America, the principal amount of One Million Three Hundred Thirty Eight Thousand
& 00/100 Dollars ($1,338,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance. The interest rate will not increase above 55.000%.
PAYMENT. Borrower will pay this loan on demand, or if no demand is made, in one
payment of all outstanding principal plus all accrued unpaid interest on May 27,
2000. In addition, Borrower will pay regular quarterly payments of accrued
unpaid interest beginning August 27, 1999, and all subsequent interest payments
are due on the same day of each quarter 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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'s Prime Rate (the
"Index"). This is the rate Lender charges or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon ▇▇▇▇▇▇▇▇'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 1st day of the following month. The
Index currently is 8.750% per annum. The interest rate to be applied to the
unpaid principal balance of this Note will be at a rate of 1.000 percentage
point over the Index, adjusted if necessary for the minimum and maximum rate
limitations described below, resulting in an initial rate of 9.750% per annum.
Notwithstanding any other provision of this Note, the variable interest rate or
rates provided for in this Note will be subject to the following minimum and
maximum rates. NOTICE: Under no circumstances will the interest rate on this
Note be less than 9.000% per annum or more than the lesser of 55.000% per annum
or the maximum rate allowed by applicable law. Notwithstanding the above
provisions, the maximum increase or decrease in the interest rate at any one
time on this loan will not exceed 1.000 percentage points.
PREPAYMENT; MINIMUM INTEREST CHARGE. ▇▇▇▇▇▇▇▇ agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, ▇▇▇▇▇▇▇▇ understands that Lender is entitled to a
minimum interest charge of $25.00. other than ▇▇▇▇▇▇▇▇'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 ▇▇▇▇▇▇ in writing, relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation to continue
to make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $10.00,
whichever is less.
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 had 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) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
▇▇▇▇▇▇▇▇'s behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) ▇▇▇▇▇▇ becomes insolvent, a receiver is
appointed for any part of ▇▇▇▇▇▇▇▇'s property. ▇▇▇▇▇▇▇▇ 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. (f) Any creditor
tries to take any of ▇▇▇▇▇▇▇▇'s property on or in which ▇▇▇▇▇▇ has a lien or
security interest. This includes a garnishment of any of ▇▇▇▇▇▇▇▇'s accounts
with ▇▇▇▇▇▇. (g) Any guarantor dies or any of the other events described in this
default section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition, or ▇▇▇▇▇▇
believes the prospect of payment or performance of the indebtedness is impaired.
(i) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within ten (10) days; or (b) if the
cure requires more than ten (10) days, immediately initiates steps which Lender
deems in lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
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▇▇-▇▇-▇▇▇ PROMISSORY NOTE PAGE 2
LOAN NO 4652100 (CONTINUED)
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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. Lender may hire or pay someone
else to help collect this Note if Borrower does not pay. ▇▇▇▇▇▇▇▇ also will pay
Lender that amount. This includes, subject to any limits under applicable law,
▇▇▇▇▇▇'s attorneys' fees and ▇▇▇▇▇▇'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. If not
prohibited by applicable law, ▇▇▇▇▇▇▇▇ 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 New Mexico. If there is a lawsuit,
▇▇▇▇▇▇▇▇ agrees upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the
courts of Bernalillo County, the State of New Mexico. This Note shall be
governed by and construed in accordance with the laws of the State of New
Mexico.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, ▇▇▇▇▇▇▇▇'s accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and ▇▇▇▇▇ accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Note against any and all such accounts, and, at
▇▇▇▇▇▇'s option, to administratively freeze all such accounts to allow Lender to
protect ▇▇▇▇▇▇'s charge and setoff rights provided on this paragraph.
COLLATERAL. This Note is secured by Contract No. 99-010 between El Paso County,
Colorado Springs, CO and Global Election Systems, Inc.
LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note may be requested orally by Borrower or by an
authorized person. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to ▇▇▇▇▇▇'s office shown
above. The following party or parties are authorized to request advances under
the line of credit until ▇▇▇▇▇▇ receives from Borrower at ▇▇▇▇▇▇'s address shown
above written notice of revocation of their authority: ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇,
President. ▇▇▇▇▇▇▇▇ agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to any
of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by ▇▇▇▇▇▇'s
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender; or (e) Lender in good ▇▇▇▇▇
▇▇▇▇▇ itself insecure under this Note or any other agreement between Lender and
Borrower.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment on this Note on its demand. lender may delay or forgo enforcing
any of its right 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 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 makor
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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.. ▇▇▇▇▇▇▇▇ AGREES TO
THE TERMS OF THIS NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
GLOBAL ELECTION SYSTEMS, INC.
BY: Signed: "▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇"
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▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
PRESIDENT AND CHIEF EXECUTIVE OFFICER
