EXHIBIT 10.16.1
CAPRIUS, INC.
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SECURED PROMISSORY NOTE
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$258,500 December 28, 1999
(Principal Amount)
CAPRIUS, INC., a Delaware corporation (herein called the "Company",
which term shall also include its successors and assigns), for value
received, hereby promises to pay to ▇▇▇▇ ▇▇▇▇▇▇ or permitted assigns (the
"Holder") on September 1, 2000, the principal sum of Two Hundred Fifty-Eight
Thousand Five Hundred Dollars ($258,500), with interest payable monthly
commencing on February 1, 2000 and on the first day of each succeeding month at
the rate of ten (10%) percent per annum accruing from December 28, 1999 on the
outstanding principal amount until the entire principal shall become paid or
otherwise satisfied, and subject to voluntary prepayment, both principal and
interest to be payable at the principal office of the Company at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Company and
the Holder may agree upon in writing.
This Note is one of a duly authorized issue of Notes of the
Company to ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇ (the "▇▇▇▇▇▇/▇▇▇▇ Notes") issued in
conversion of payments due under certain termination and severance agreements
(the "Termination Agreements"), dated as of June 28, 1999, by the Company with
each ▇▇▇▇▇▇ and ▇▇▇▇.
1. DEFINITION OF TERMS
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For purposes of this Note, unless the context otherwise requires:
1.1 Bridge Notes. Bridge Notes shall mean, collectively, the Notes
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of a duly authorized issue of notes of the Company limited in aggregate
principal amount to $600,000, maturing on February 29, 2000.
1.2 Business Day. Business Day shall mean a day other than a
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Saturday, Sunday or a day when banking institutions in New York City are
authorized by law, regulation or order to remain closed.
1.3 Holder of Record. Holder of Record shall mean in connection
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with any Note the payee thereof unless a subsequent holder shall have presented
to the Company such Note, duly assigned to him and delivered to the Company a
written notice of his acquisition of the Note and designated in writing an
address to which payments and notices in respect of the Note shall be mailed,
in which case the term shall mean such subsequent holder.
1.4 Maturity. As used herein the terms "maturity" and "Maturity"
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shall mean October 1, 2000 or such earlier or later date on which the principal
amount of this Note becomes payable hereunder.
1.5 Person. Person shall mean any individual, corporation,
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partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
2. SECURITY
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2.1 Security Agreement. If the ▇▇▇▇▇▇/▇▇▇▇ Notes are outstanding on
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March 1, 2000, ▇▇▇▇▇▇▇ will grant to the Holder a joint security interest with
the holders of the other outstanding ▇▇▇▇▇▇/▇▇▇▇ Notes in the inventory,
receivables and non-leased equipment of the Strax Division of the Company.
Such security interest shall be pursuant to the terms of a Security Agreement
to be executed among the initial holders of the ▇▇▇▇▇▇/▇▇▇▇ Notes and the
Company and shall become effective only if the ▇▇▇▇▇▇/▇▇▇▇ Notes are
outstanding on March 1, 2000. Between December 28, 1999 and March 1, 2000, the
Company will not grant a security interest to a third party in the assets of
the Strax Division, except (i) in connection with a transaction on which the
net proceeds will be used to prepay all or a portion of the then outstanding
principal and accrued interest on the ▇▇▇▇▇▇/▇▇▇▇ Notes pursuant to Section 3.3
hereof or (ii) in connection with an installment purchase or a capitalized
lease of equipment.
3. PREPAYMENT OF NOTE
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3.1 Note to Be Callable for Prepayment. The Company shall have the
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right, subject to compliance with the provisions of this Article 3, to call
this Note for prepayment at any time (herein referred to as the "Prepayment
Date"), either in whole or in part, at the principal amount so to be prepaid,
together with accrued interest thereon to the Prepayment Date. Any prepayment
on this Note shall be proportionate to a simultaneous prepayment on the other
▇▇▇▇▇▇/▇▇▇▇ Notes.
3.2 Notice of Call for Prepayment. Notice of call for prepayment of
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this Note or any portion hereof shall be given to the Holder of Record at his
address in accordance with Section 7.2 hereof at least three (3) Business Days
prior to the Prepayment Date. Upon notice of call for prepayment being given as
aforesaid, the Company shall prepay on the Prepayment Date the entire principal
amount of this Note or the portion hereof, as the case may be, so called for
prepayment as hereinabove provided, and shall pay all accrued and unpaid
interest on the principal amount being prepaid.
3.3 Sale of the Strax Division. (a) If the Company shall sell or
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otherwise dispose of the Strax Division (the "Strax Sale") prior to the
Maturity of this Note, the Company shall apply the net cash proceeds of such
Sale (after payment of all commissions, expenses and taxes related to such
Sale) toward prepayment of the ▇▇▇▇▇▇/▇▇▇▇ Notes and the Bridge Notes (if they
are still outstanding) in accordance with this Article 3.
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(b) If the net cash proceeds to be received by the Company on a
Strax Sale would be insufficient to pay the outstanding amounts on the
▇▇▇▇▇▇/▇▇▇▇ Notes and the outstanding Bridge Notes, the Holders of Record of
more than 50% of the outstanding principal amount of the ▇▇▇▇▇▇/▇▇▇▇ Notes must
consent to such Sale. The net cash proceeds from the Strax Sale shall be paid
on a pro rata basis among the outstanding indebtedness on the ▇▇▇▇▇▇/▇▇▇▇ Notes
and the Bridge Notes in accordance with Section 3.3(c) hereof, and the
remaining principal amounts on the ▇▇▇▇▇▇/▇▇▇▇ Notes shall be payable on
September 1, 2000. The Company and the Holders of Record of the ▇▇▇▇▇▇/▇▇▇▇
Notes shall use their respective best efforts to reach agreement to secure such
remaining principal amounts.
(c) The Company shall effect the prepayment required by this
Section within ten (10) Business Days after its receipt of the net proceeds
from the Strax Sale. If less than the entire principal amount of the
▇▇▇▇▇▇/▇▇▇▇ Notes and the Bridge Notes at the time outstanding shall be called
for prepayment, upon the Strax Sale in accordance with Section 3.3(b) hereof,
the Company shall allocate the principal amount so called for prepayment among
the Holders of the ▇▇▇▇▇▇/▇▇▇▇ and Bridge Notes in proportion, as nearly as may
be, to the aggregate principal amount of Notes then held by the respective
holders thereof. In any such allocation (i) the Company may, according to such
method as it shall deem proper in its discretion, make such adjustments by
increasing or decreasing by not more than $1,000 the amount which would be
allocable on the basis of exact proportion to any holders, as may be necessary
to the end that the principal amount so allocated shall be in each instance an
integral multiple of $1,000 and (ii) the Company shall not be required to
allocate any amount to any holder to which the amount allocable on the basis
of the exact proportion would be less than $1,000.
3.4 Prepayment of Portion of Note. Upon any prepayment of a portion
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of the principal amount of this Note, the Holder, at his option, (i) may
require the Company to execute and deliver at the expense of the Company a new
Note dated as of the date to which interest on this Note has been paid, and
payable to such person or persons as may be designated by the Holder, for the
aggregate principal amount of this Note then remaining unpaid, upon surrender
of this Note and payment of applicable transfer taxes, if any, or (ii) may
present this Note to the Company for notation hereon of the payment of the
portion of the principal amount of this Note so prepaid.
4. COVENANTS OF THE COMPANY
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The Company agrees, and covenants that until such time as this
Note has been paid in full the Company will comply with the following covenants:
4.1 Payment of Principal and Interest. The Company will duly and
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punctually pay the principal of and interest on this Note in accordance with
the terms of this Note.
4.2 Maintenance of Office or Agency. The Company will maintain an
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office in the State of New Jersey where this Note may be presented or
surrendered for payment, where this Note may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of
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this Note may be served. The Company will give prompt written notice to the
Holder of the location, and of any change in the location, of such office.
4.3 Corporate Existence. The Company will do or cause to be done all
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things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchise; provided, however,
that the Company shall not be required to preserve any right or franchise if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holder.
4.4 Consolidation, Merger, Conveyance or Transfer. The Company
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shall not consolidate with or merge into any other corporation or convey or
transfer its properties and assets substantially as an entirety to any Person
(excluding a sale of the Strax Division), unless:
(a) the corporation formed by such consolidation into which the
Company is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall expressly assume
the due and punctual payment of the principal of and interest on all the Notes;
and
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing.
5. REMEDIES
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5.1 Events of Default. "Event of Default", wherever used herein
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means any one of the following events (whatever the reason for such Event of
Default and whether it shall be effected by operation of law pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of principal or any installment of
interest upon this Note for a period of five (5) Business Days after it
becomes due and payable whether at its Maturity or otherwise; or
(2) default in the performance, or breach, of any covenant of the
Company in this Note (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), or, after its effectiveness, under the Security Agreement;
or
(3) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the
Federal Bankruptcy Code or any other applicable Federal or State law,
or appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part
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of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and
in effect for a period of sixty (60) consecutive days; or
(4) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of
a petition or answer or consent seeking reorganization or relief under
the Federal Bankruptcy Code or any other applicable Federal or State
law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(5) the Company shall have entered against it a final judgment by
a court having jurisdiction which, if satisfied, would have a material
adverse effect on the financial condition of the Company;
then and in each and every case, unless the principal and accrued interest on
this Note shall have already become due and payable, the Holder may by notice in
writing to the Company declare the unpaid balance of this Note to be forthwith
due and payable, and thereupon such balance, including the principal of this
Note and accrued interest thereon, shall become so due and payable without
presentation, protest or further demand or notice of any kind, all of which are
hereby expressly waived.
5.2 Enforcement of Remedies. In case any one or more of the Events
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of Default specified in Section 5.1 hereof shall have occurred and be
continuing, the Holder may proceed to protect and enforce his rights either by
suit in equity or by action at law, for the specific performance of any
covenant or provision contained herein, or proceed to enforce payment of this
Note or to enforce any other legal or equitable right of the Holder of this
Note; and under the Security Agreement if it is then in effect.
5.3 Waiver by Company. To the extent permitted by applicable law,
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the Company hereby agrees to waive, and does hereby absolutely and irrevocably
waive and relinquish the benefit and advantage of any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter
exist, which, but for this provision might be applicable to any sale made under
the judgment, order or decree of any court or otherwise, based on this Note or
any claim for interest on this Note or any foreclosure thereunder.
5.4 Amendments and Waivers. No course of dealing between the Company
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and the Holder of this Note and no delay on the part of the Holder in
exercising any rights hereunder shall operate as a waiver of the rights of the
Holder. No covenant or other provision of this Note nor any default or Event of
Default in connection therewith may be waived otherwise than by a written
instrument signed by the Holder. Any provision of this Note to the contrary
notwithstanding, changes in or additions to this Note may be made, and
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compliance with any term, convenant, condition or provision set forth in this
Note may be omitted or waived (either generally or in a particular instance
and either retroactively or prospectively), provided a similar change or
addition is made in the remaining outstanding ▇▇▇▇▇▇/▇▇▇▇ Notes, and any
default or Event of Default and the consequences thereof may be waived.
5.5 Cost and Expense of Collection. The Company covenants and
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agrees that if default be made in any payment or prepayment of principal of,
or interest on, the Notes, it will, to the extent permitted under applicable
law, pay to the Holder such further amount as shall be sufficient to cover the
cost or expense of collection, including reasonable compensation to the
attorneys of the Holder for all services rendered in that connection.
6. PAYMENT; EXCHANGE AND TRANSFER; LOST NOTES
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6.1 Payments. Interest and principal to be paid in respect of this
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Note shall be paid at the place provided herein, without any presentment or
notation of payment, and the amount of principal so paid on this Note shall be
regarded as having been retired and cancelled at the time of payment. The
Holder of Record shall, however, at the place of payment of this Note at any
time during its regular business hours on any day when a payment of principal
is due, permit the Company to make appropriate notation hereon of the amount
of principal which has been paid on this Note. The Holder of Record, before
any transfer hereof, shall make a notation hereon of all principal payments
theretofore made hereon, and shall in writing notify the Company of the name
and address of the respect to which interest and transferee.
6.2 Exchange and Transfer. The Holder of Record of this Note may,
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prior to maturity or prepayment thereof, surrender the Note held by him for
exchange, at the office designated by the Company pursuant to Section 3.2
hereof. Within a reasonable time thereafter and without expense (other than
transfer taxes, if any) to such Holder of Record, the Company shall issue in
exchange thereof, or in exchange for the portion thereof not surrendered in
payment as aforesaid (as the case may be), in such denominations and made
payable to such person or persons, or order, as such Holder of Record shall
designate, a Note or Notes for the same aggregate principal amount as the
unpaid principal amount of the Note or Notes so surrendered, having the same
maturity and rate of interest, containing the same provisions and subject to
the same terms and conditions as the Note or Notes as surrendered.
6.3 Lost, etc., Notes. Upon receipt by the Company of evidence
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satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in case of loss, theft or destruction) of indemnity satisfactory to it,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Note, if mutilated, the
Company will make and deliver a new Note of like tenor in lieu of such Note.
7. MISCELLANEOUS PROVISIONS
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7.1 Benefits. This Note shall be binding upon the Company and its
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successors and assigns and shall inure to the benefit of the Holder and his
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heirs and administrators, provided that the Holder may transfer all or part of
the unpaid principal amount of this Note to a member of his immediate family
or to a trust of which the Holder or a member of his immediate family is the
beneficiary.
7.2 Addresses of Parties. All communications provided for herein
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or with reference to this Note shall be deemed to have been sufficiently given
or served for all purposes if sent by certified or registered mail, postage
and purposes if sent by certified or registered mail, postage and charges
prepaid, to the following addresses: if to the Company, at its office, ▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, or at any other
address designated by the Company in writing to the Holder of Record of this
Note; and if to any Holder of Record of the Note, as specified in writing to
the Company by an initial or successor Holder of Record.
7.3 Governing Law. This Note shall be deemed to be a contract made
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under, and to be construed in accordance with, the laws of the State of New
Jersey, without giving effect to conflicts of law.
7.4 Section Headings. The descriptive section headings herein have
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been inserted for convenience only and shall not be deemed to limit or
otherwise affect the construction of any provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed in its corporate name by its President, under its corporate seal,
attested by its Secretary, and dated the day and year first above written.
CAPRIUS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇, President
ATTEST:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
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