{"id":41041,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/grid-promissory-demand-note-loislaw-com-inc-and-wolters-kluwer.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"grid-promissory-demand-note-loislaw-com-inc-and-wolters-kluwer","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/grid-promissory-demand-note-loislaw-com-inc-and-wolters-kluwer.html","title":{"rendered":"Grid Promissory Demand Note – Loislaw.com Inc. and Wolters Kluwer U.S. Corporation"},"content":{"rendered":" GRID PROMISSORY DEMAND NOTE\n\n\nDecember 19, 2000 $7,000,000\n\n A. TERMS OF LOANS\n\n FOR VALUE RECEIVED, on demand as permitted herein, LOISLAW.COM, INC., a\ncorporation formed under the laws of the State of Delaware (the \"BORROWER\"),\nwith offices at 105 North 28th Street, Van Buren, Arkansas 72956, promises to\npay to the order of WOLTERS KLUWER U.S. CORPORATION, a Delaware corporation (the\n\"LENDER\"), at its offices at c\/o Wolters Kluwer United States Inc., 161 North\nClark Street, 48th Floor, Chicago, Illinois 60601-3221, or at such other place\nas the Lender may designate in writing, the principal sum of the lesser of (A)\nSEVEN MILLION DOLLARS ($7,000,000), or (B) the principal amount of loans (the\n\"LOANS\") outstanding hereunder, as conclusively evidenced on the grid attached\nhereto as Schedule I.\n\n 1. INTEREST; PREPAYMENT. (a) Borrower will pay interest on the unpaid\nprincipal amount hereof, computed on the basis of the actual number of days\nelapsed in a 360-day year, at a rate per annum which shall be equal to nine and\none-half percent (9.5%) per annum.\n\n (b) Borrower will pay interest, at the rate described above, on\n demand, and if no demand is made, monthly on the last Business\n Day (\"BUSINESS DAY\" shall mean any day other than Saturday,\n Sunday, or any other day on which commercial banks located in\n the State of Arkansas or in the State of New York are required\n or authorized by law to be closed for business) of each month\n in each year, commencing December 29, 2000, at maturity\n (whether by acceleration or otherwise) and upon the making of\n any prepayment, as hereinafter provided. In addition, Borrower\n will pay interest on any overdue installment of principal for\n the period for which overdue, on demand, at a rate equal to\n eleven and one-half percent (11.5%) per annum. In no event\n shall interest exceed the maximum legal rate permitted by law.\n All payments, including insufficient payments, shall be\n credited, regardless of their designation by Borrower, first\n to collection expenses due hereunder, then to outstanding late\n charges, then to interest due and payable but not yet paid,\n and the remainder, if any, to principal. All payments by\n Borrower or any endorser of this Note on account of principal,\n interest or fees hereunder shall be made in lawful money of\n the United States of America, in immediately available funds.\n\n (c) The Loans may be prepaid by the Borrower, in whole or in part,\n at any time without penalty or premium.\n\n 2. ADVANCES; SCHEDULE I. The Loans in the aggregate shall not exceed\nfive million ($5,000,000) dollars prior to April 19, 2001, or seven million\n($7,000,000) dollars on or after \n\n\n\n\nApril 19, 2001. The Lender will advance the principal amount of each Loan to the\nBorrower within two Business Days after receipt from the Borrower of a request\ntherefor specifying the amount of the Loan requested, which requests may be made\nby the Borrower at any time prior to the date on which the Lender has made\ndemand for repayment of the Loans in accordance with Section 3 hereof. The\nLender is hereby authorized by Borrower to enter and record on Schedule I\nattached hereto the amount of each Loan made under this Note and each payment of\nprincipal thereon without any further authorization on the part of Borrower or\nany endorser or guarantor of this Note. To the extent interest is not paid when\ndue, the Lender is authorized and directed to enter the amount of such interest\nas a Loan on Schedule I. The entry of a Loan on said schedule shall be prima\nfacie and presumptive evidence of the entered Loan and its conditions. The\nLender's failure to make an entry, however, shall not limit or otherwise affect\nthe obligations of Borrower or any endorser or guarantor of this Note.\n\n 3. LOANS DUE ON DEMAND. Notwithstanding any terms in this Note to the\ncontrary, the enumeration in this Note of specific obligations of Borrower to\nthe Lender and\/or conditions to the availability of funds under this Note shall\nnot be construed to qualify, define, or otherwise limit the Lender's right,\npower, or ability, at any time, under applicable law, to demand the payment of\nall Loans outstanding under this Note within five Business Days of written\nnotice of such demand to the Borrower, PROVIDED, HOWEVER, that Lender shall not\nmake demand prior to the earlier to occur of (x) the termination of the\nAgreement and Plan of Merger by and among Wolters Kluwer U.S. Corporation, a\nDelaware corporation, LL Acquisition Corp., a Delaware corporation, and Borrower\n(the \"MERGER AGREEMENT\"), dated as of December 19, 2000, or (y) the consummation\nof the transactions contemplated thereby; and PROVIDED FURTHER, that in the\nevent that the Merger Agreement is terminated by Wolters Kluwer U.S. Corporation\nor LL Acquisition Corp. other than as permitted by the terms of the Merger\nAgreement or in the event any material provision of the Merger Agreement is\nbreached by Wolters Kluwer U.S. Corporation or LL Acquisition Corp., then\nfollowing such termination or material breach the Lender shall not make demand\nprior to June 19, 2001 hereunder absent the occurrence of an Event of Default\n(other than an Event of Default under Section 8(a)(i) hereof).\n\n 4. SECURITY INTEREST. This Note is secured by the liens granted by the\nBorrower to the Lender pursuant to that certain Security Agreement dated as of\nthe date hereof between the Borrower and the Lender, in the collateral described\ntherein.\n\n 5. USE OF PROCEEDS. Borrower will not, directly or indirectly, use any\nproceeds of Loans hereunder for the purpose of purchasing or carrying any margin\nstock within the meaning of Regulation U of the Board of Governors of the\nFederal Reserve System or to extend credit to any person for the purpose of\npurchasing or carrying any such margin stock, or for any purpose which violates,\nor is inconsistent with, any of Regulations T, U or X of such Board of\nGovernors.\n\n B. REPRESENTATIONS AND WARRANTIES\n\n 6. Borrower represents and warrants to the Lender that:\n\n (a) Borrower is a corporation duly incorporated, validly existing,\nand in good \n\n\n 2\n\n\nstanding under the laws of the jurisdiction of its incorporation, has the\ncorporate power and authority to own its assets and to transact the business in\nwhich it is now engaged or proposes to be engaged, is duly qualified as a\nforeign corporation and is in good standing under the laws of each other\njurisdiction in which such qualification is required, except where the failure\nto so qualify or be in good standing would not have a material adverse effect on\nthe assets, liabilities, financial condition or results of operations of the\nCompany (a \"Material Adverse Effect\")\n\n (b) Borrower has full power and authority to execute and deliver\nthis Note and to incur the obligations provided for herein, all of which have\nbeen duly authorized by all proper and necessary corporate action. No consent or\napproval of stockholders or of any governmental or administrative authority,\ninstrumentality, or agency is required as a condition to the validity of the\nNote.\n\n (c) The Note is legal, valid, and contains binding obligations of\nBorrower enforceable against Borrower in accordance with its terms, except as\nenforcement may be limited by bankruptcy, insolvency, moratorium or other\nsimilar laws relating to creditors' rights generally and except that the\navailability of equitable remedies, including specific performance, is subject\nto the discretion of the court before which any proceeding therefor may be\nbrought.\n\n (d) Borrower is not in default in the performance, observance or\nfulfillment of any the obligations, covenants, or conditions contained in any\nagreement or instrument to which it is a party, except where such default would\nnot have a Material Adverse Effect.\n\n (e) There is no pending or threatened action or proceeding against\nor affecting Borrower before any court, governmental agency, or arbitrator which\nis reasonably likely to , in any one case or in the aggregate, have a Material\nAdverse Effect or materially and adversely affect the ability of Borrower to\nperform its obligations under this Note.\n\n (f) Borrower has no Subsidiaries (as defined below), and will notify\nthe Lender promptly upon the formation thereof.\n\n C. PERFECTION OF LIEN\n\n 7. So long as this Note remains unpaid or the Lender shall have any\ncommitments hereunder, Borrower shall cause the Lender to have a perfected first\nand prior security interest in all of the accounts and general intangible assets\nof the Borrower and the proceeds thereof, and the Borrower shall take all\nactions requested by Lender necessary or appropriate to accomplish the same.\n\n D. EVENTS OF DEFAULT\n\n 8. If any of the following events shall occur and be continuing:\n\n (a) Borrower shall fail to make any payment of (i) principal\noutstanding hereunder on demand as demand is permitted hereunder, or (ii)\nfollowing three (3) Business \n\n\n 3\n\n\nDays' written notice, interest on this Note or any fee provided for herein on\ndemand as demand is permitted hereunder;\n\n (b) Borrower shall default in the performance or observance of any\ncovenant or agreement contained herein following five days' written notice\nthereof;\n\n (c) any representation or warranty made by or on behalf of Borrower\nin this Note, the Merger Agreement or in any other certificate, agreement,\ninstrument, or statement delivered to the Lender by or on behalf of Borrower\nshall at any time prove to have been incorrect when made in any material\nrespect;\n\n (d) any judgment against Borrower or any attachment, levy or\nexecution against any of its properties for any material amount shall remain\nunpaid, or shall not be released, discharged, dismissed, stayed or fully bonded\nfor a period of sixty (60) days or more after its entry, issue or levy, as the\ncase may be;\n\n (e) Borrower shall make an assignment for the benefit of creditors,\nor a trustee, receiver or liquidator shall be appointed for Borrower or for any\nof their property, or\n\n (f) the commencement of any proceedings by Borrower under any\nbankruptcy, reorganization, arrangement of debt, insolvency, readjustment of\ndebt, receivership, liquidation or dissolution law or statute (including, if\nBorrower is a partnership, its dissolution pursuant to any agreement or\nstatute), or the commencement of any such proceedings without the consent of\nBorrower and such proceedings shall continue undischarged for a period of sixty\n(60) days;\n\n(each of the foregoing to constitute an \"EVENT OF DEFAULT\") then, and in any\nsuch event, the Lender may declare the entire unpaid principal amount of this\nNote and all interest and fees accrued and unpaid hereon to be immediately due\nand payable, whereupon the same shall become and be forthwith due and payable,\nwithout presentment, demand, protest or notice of any kind, all of which are\nhereby expressly waived by Borrower.\n\n BORROWER HEREBY AFFIRMS, ACKNOWLEDGES AND RATIFIES THAT, SUBJECT SOLELY TO\nTHE PROVISOS STATED IN SECTION 3 HEREOF, ALL AMOUNTS DUE UNDER THIS NOTE ARE\nPAYABLE ON DEMAND, WHICH DEMAND MAY BE MADE AT ANY TIME BY THE LENDER IN ITS\nSOLE DISCRETION IRRESPECTIVE OF WHETHER AN EVENT OF DEFAULT HAS OCCURRED.\n\n 9. DEFINITION OF SUBSIDIARY. For purposes of this Note, the term\n\"SUBSIDIARY\" shall mean and include any corporation of which more than 50% of\nthe outstanding shares of capital stock having ordinary voting power to elect a\nmajority of the Board of Directors of such corporation (irrespective of whether\nor not at the time capital stock of any other class or classes of such\ncorporation shall or might have voting power upon the occurrence of any\ncontingency) is \n\n\n 4\n\n\nat the time, directly or indirectly, owned by Borrower or by one or more other\nSubsidiaries.\n\n E. MISCELLANEOUS\n\n 10. GOVERNING LAW. This Note shall be governed by, and construed in\naccordance with, the laws of the State of Delaware, without regard to its rules\non conflicts of laws.\n\n 11. NOTICES, ETC. All notices and other communications provided for\nunder this Note shall be in writing (including telegraphic, telex, and facsimile\ntransmissions) and mailed or transmitted or delivered, if to Borrower, at\nBorrower's address indicated in the Lender's records as of the date of such\nnotice, with a copy to Novakov Davis & Munck, 900 Three Galleria Tower, 13155\nNoel Road, Dallas, Texas 75240, Attention: Kenn W. Webb, Esq. and to Akin, Gump,\nStrauss, Hauer & Feld, L.L.P., 1700 Pacific Avenue, Suite 4100, Dallas, Texas\n75201, Attention: Michael E. Dillard, P.C., and if to the Lender, at its address\nat c\/o Wolters Kluwer United States Inc., 161 North Clark Street, 48th Floor,\nChicago, Illinois 60601-3221, Attention: Bruce C. Lenz, with a copy to Pryor\nCashman Sherman & Flynn LLP, 410 Park Avenue, 10th Floor, New York, New York\n10022, Attention: Arnold J. Schaab, Esq. or, as to each party, at such other\naddress as shall be designated by such party in a written notice to the other\nparty complying as to delivery with the terms of this paragraph. Except as\notherwise provided in this Note, all such notices and communications shall be\neffective either on receipt if delivered by hand, or three (3) Business Days\nfollowing deposit, postage fully paid, in the mails by certified mail.\n\n 12. NO WAIVER. No failure or delay on the part of the Lender in\nexercising any right, power, or remedy hereunder shall operate as a waiver\nthereof; nor shall any single or partial exercise of any such right, power, or\nremedy preclude any other or further exercise thereof or the exercise of any\nother right, power, or remedy hereunder. The rights and remedies provided herein\nare cumulative, and are not exclusive of any other rights, powers, privileges,\nor remedies, now or hereafter existing, at law or in equity or otherwise.\n\n 13. COSTS AND EXPENSES. Borrower shall reimburse the Lender for all\ncosts and expenses incurred by the Lender and shall pay the reasonable fees and\ndisbursements of counsel to the Lender in connection with enforcement of the\nLender's rights hereunder. Borrower shall also pay any and all taxes (other than\ntaxes on or measured by net income of the holder of this Note) incurred or\npayable in connection with the execution and delivery of this Note.\n\n 14. AMENDMENTS. No amendment, modification, or waiver of any provision\nof this Note nor consent to any departure by Borrower therefrom shall be\neffective unless the same shall be in writing and signed by the Lender and then\nsuch waiver or consent shall be effective only in the specific instance and for\nthe specific purpose for which given.\n\n 15. SUCCESSORS AND ASSIGNS. This Note shall be binding upon Borrower and\nits heirs, legal representatives, successors and permitted assigns and the terms\nhereof shall inure to the benefit of the Lender and its successors and permitted\nassigns, including subsequent holders hereof. Notwithstanding the foregoing,\nneither party shall assign its rights or obligations under \n\n\n 5\n\n\nthis Note without the consent of the other party.\n\n 16. SEVERABILITY. The provisions of this Note are severable, and if any\nprovision shall be held invalid or unenforceable in whole or in part in any\njurisdiction, then such invalidity or unenforceability shall not in any manner\naffect such provision in any other jurisdiction or any other provision of this\nNote in any jurisdiction.\n\n 17. ENTIRE AGREEMENT. This Note sets forth the entire agreement of\nBorrower and the Lender with respect to this Note and may be modified only by a\nwritten instrument executed by Borrower and the Lender.\n\n 18. HEADINGS. The headings herein are for convenience only and shall not\nlimit or define the meaning of the provisions of this Note.\n\n 19. JURISDICTION; SERVICE OF PROCESS. Borrower agrees that in any action\nor proceeding brought on or in connection with this Note (i) the District Court\nof the State of Illiniois for the County of Cook, or (in a case involving\ndiversity of citizenship) the United States District Court having jurisdiction\nof said County of Cook, shall have jurisdiction of any such action or\nproceeding, (ii) service of any summons and complaint or other process in any\nsuch action or proceeding may be made by the Lender upon Borrower by registered\nor certified mail directed to Borrower at its address referenced in paragraph 11\nabove, Borrower hereby waiving personal service thereof, and (iii) within thirty\n(30) days after such mailing Borrower shall appear or answer to any summons and\ncomplaint or other process, and should Borrower fail to appear to answer within\nsaid thirty (30) day period, it shall be deemed in default and judgment may be\nentered by the Lender against Borrower for the amount as demanded in any summons\nor complaint or other process so served.\n\n 20. WAIVER OF THE RIGHT TO TRIAL BY JURY. BORROWER HEREBY IRREVOCABLY\nWAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR\nCOUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, IN ANY MANNER\nCONNECTED WITH THIS NOTE OR ANY TRANSACTIONS HEREUNDER.\n\n\n [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]\n\n\n\n\n 6\n\n\n IN WITNESS WHEREOF, Borrower has caused this Note to be executed and\ndelivered as of the day and year and at the place first above written.\n\n\n BORROWER:\n\n LOISLAW.COM, INC.\n\n\n By: \/s\/ Kyle D. Parker\n --------------------------------\n Name: Kyle D. Parker\n Title: Chairman and Chief Executive\n Officer\n\n\n\n\n\n\n 7\n\n\n\n SCHEDULE I TO NOTE\n\n\nBorrower: Loislaw.com, Inc. Date of Note: December 19, 2000\n\n<\/pre>\n
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