<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) - September 30, 1997
General Credit Corporation
(Exact name of registrant as specified in its charter)
New York 0-28910 13-3895072
---------------------- ---------------- -------------
(State or other juris- (Commission File (IRS Employer
diction of incorporation) Number) Identification No.)
370 Lexington Avenue,
Suite 2000
New York, New York 10021
---------------------------------------- ----------
(Address or principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 697-4441
--------------
NONE
-------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
On September 30, 1997, General Credit Corporation (the
"Company") acquired Ace Ventures, Inc. ("Ace") for a total
purchase price of $480,000 consisting of $100,000 cash and the
delivery of two promissory notes in the aggregate principal
amount of $230,000 and $150,000, respectively, subject to
adjustment in the event certain sales are not generated as a
result of the acquisition. Prior to the Company's acquisition
of Ace, Ace was engaged as an exclusive commissioned agent by
the Company to arrange check factoring business primarily with
persons of Asian descent. As a result of the acquisition by
the Company of Ace, Dong Hyun Kang entered into an employment
agreement with the Company.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Not Applicable
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
None
(b) Pro forma financial information
None
(c) Exhibits
10.1 Contract for Sale of Business by and between
the Company and Ace dated September 30,
1997.
10.2 Promissory Note made by the Company to Dong
Hyun Kang dated September 30, 1997 in the
principal amount of $230,000.00
10.3 Promissory Note made by the Company to Sue
Yi dated September 30,1997 in the principal
amount of $150,000.00.
10.4 Employment Agreement by and between the
Company and Dong Hyun Kang dated October 15,
1997.
2
<PAGE> 3
Item 8. Change in Fiscal Year
Not Applicable
Item 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable
[THIS SPACE INTENTIONALLY LEFT BLANK]
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL CREDIT CORPORATION
(Registrant)
Dated: October 6, 1997 By: /s/ Irwin Zellermaier
----------------------
Irwin Zellermaier,
Chief Executive Officer
4
<PAGE> 1
EXHIBIT 10.1
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<CAPTION>
<S> <C> <C>
V 82 Contract for Sale of Business, Inc. or Corp. 1984 By Julius Blumberg, Inc.
(Uniform Commercial Code-Bulk Transfer) 12-89 Publisher, NYC 10013
</TABLE>
AGREEMENT, made the 30th day of September 1997 in the State of New
York between ACE VENTURE, INC., whose address is 499 Seventh Avenue, North 704,
New York, New York 10018 hereinafter called the Transferor, and GENERAL CREDIT
CORP. whose address is 370 Lexington Avenue, Suite 2000, New York, N.Y. 10017
hereinafter called the Transferee.
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SUBJECT 1. The Transferor agrees to sell to the Transferee and the
MATTER OF Transferee agrees to buy the following described business:
SALE check cashing business located at 499 Seventh Avenue, North
704, New York, N.Y. 10018 Including the stock in trade,
fixtures, equipment, contract rights, lease, good will,
licenses, rights under any contract for telephone service or
other rental, maintenance or use of equipment, machinery and
fixtures at the said premises, more particularly described in
Schedule A hereto attached, free and clear of any debts,
mortgages, security interests or other liens or encumbrances
except as herein stated. Title shall be closed on the 30th
closing date day of September 1997 at 10 A.M. at the office of Daniel K.
Lee, Esq., 1250 Broadway, 20th Floor, New York, New York
PURCHASE 2. The purchase price to be paid by Transferee is $480,000.00
PRICE
TERMS OF 3. The terms of payment are as follows:
PAYMENT
Upon execution of this agreement
By cash or certified check, receipt of which is
hereby acknowledged $100,000.00
Upon execution and delivery of Bill of Sale
By cash or certified check $
By execution and delivery of two promissory note of
the following tenor, to be secured by a security
interest in the goods and chattels and all other
personal property mentioned in Schedule A hereof and
all other personal property, goods and chattels
thereafter acquired used in connection with the
aforesaid business; together will all proceeds
thereof and all increases, substitutions,
replacements, additions and accessions thereto. $380,000.00
$380,000.00 payable in 72 equal monthly
installments with 10% interest per annum, the first
of which shall be due Nov. 15, 1997 and thereafter
on the 1st day of each and every succeeding month
until fully amortized.*
Transferee agrees to perfect such security interest
by executing and delivering to Transferor a Security
Agreement and a Financing Statement, in accordance
with the provisions of the Uniform Commercial Code,
and all other instruments or documents as may
* The purchaser shall execute two promissory notes, one
payable to the order of Dong Hyun Kang in the
principal amount of $230,000 and the other payable to
the order of Sue Yi in the principal amount of
$150,000.
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be required by the Transferor. The filing fees
thereof shall be paid by the Transferee.
By taking title subject to and assuming payment of
the sum of $
Secured by a now a lien affecting the business and
assets or a portion thereof and paying same
according to the terms thereof.
ADJUSTMENTS 4. At the closing the following adjustments shall be made:
rents, insurance premiums, taxes, electricity, gas, fuel,
water, interest on mortgages or other liens.
CREDITORS LIST 7. Transferor shall furnish Transferee with a list of
Transferor's existing creditors, containing the names and
business addresses of all creditors of the Transferor, with
the amounts owed to each and also the names of all persons
who are known to the Transferor to assert claims against the
Transferor even though such claims are disputed. Such list
shall be signed and sworn to or affirmed by the Transferor or
his agent and, unless such list is appended hereto, it shall
be delivered to Transferee at least 15 days before the
closing date; provided that if Transferee takes possession of
the goods or pays for them before that date such list shall
be furnished at least 15 days before the happening of either
event.
PRESERVATION 8. Transferee shall preserve the list of creditors
OF LIST AND aforementioned as well as the schedule of property (Schedule
SCHEDULE A hereof) for a period of 6 months next following the date of
transfer of title and shall permit inspection of either or
both and copying therefrom at all reasonable hours by any
creditor of the Transferor; in lieu thereof, Transferee may
file such list and schedule in the Office of the Secretary
(Department)of State.
NOTICE TO 9. Transferee shall give notice to creditors of the transfer
CREDITORS at least 10 days before taking possession of the goods or
paying for them, whichever happens first. Notice shall be
given in the form and manner as provided in the Uniform
Commercial Code.
RESTRICTIVE 10. The bill of sale shall contain a covenant by the
COVENANT Transferor and all other persons heretofore active in the
said business or in any way interested therein with the
Transferor, not to reestablish, re-open, be engaged in, nor
in any manner whatsoever become interested, directly or
indirectly, either as employee, as owner, as partner, as
agent, or as stockholder, director or officer of a
corporation, or otherwise, in any business, trade or
occupation similar to the one hereby agreed to be sold,
within the area bounded:
northerly by........................................................
southerly by................Not Applicable..........................
easterly by.........................................................
and westerly by.....................................................
for a term of....................... years from the closing date.
LEASE 11. Transferor further agrees, at the time of closing, to
assign and transfer as part of this sale the existing lease
or to execute and deliver, or to procure the execution and
delivery, to the Transferee of a new lease or an extension of
the term of the existing lease, covering the premises used in
connection with said business and providing for a continuous
term which shall expire on the day of
19 .
rent The rend during such term shall not exceed $ per month.
assumption Transferee shall assume full performance of the existing Lease, if assigned.
security Security in the sum of $
Now held by the landlord under the existing lease, is hereby added to the amount
</TABLE>
<PAGE> 3
<TABLE>
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of the purchase price and is to be paid to the Transferor by
the Transferee at the closing, less any valid set-off or
counterclaim asserted by the landlord. Transferor shall also
assign and transfer to the Transferee all of the Transferor's
right, title and interest in said security. Any default on
the part of the Transferor with respect to the provisions of
this paragraph shall forthwith entitle the Transferee to
repayment in full, on demand, of any deposit or payment on
account hereunder.
LIQUIDATED 12. Any willful, capricious or other inexcusable default
DAMAGES hereunder on the part of either party shall entitle the
aggrieved party to the sum of $ as liquidated damages for
breach of this contract in addition to repayment in full of
any sum paid hereunder as aforesaid, said amount being hereby
agreed upon by reason of the difficulty in reducing the exact
damages actually sustained to a mathematical certainty.
BROKER 13. The parties agree that No broker is involved in this
sale. of No.
commissions Is the only broker who brought about this sale. The
Transferor shall pay to the Broker when and if title closes a
commission at the rate of per cent of the purchase price.
WARRANTIES 14. The warranties and covenants contained herein shall
SURVIVE survive the Bill of Sale and become a part thereof and
continue in full force as though set forth at length therein.
PRIOR NAMES 15. Transferor represents that Transferor has not used any
AND ADDRESS other business names and/or addresses within the three years
last past except as follows:
DEFINITION OF 16. The term "goods" as defined and used in the Uniform
GOODS Commercial Code shall apply to this agreement.
CAPTIONS 17. The captions are inserted only as a matter of convenience
and for reference and in no way define, limit or describe the
scope of this agreement nor the intent of any provision
thereof.
</TABLE>
The terms, warranties and agreements hereto contained shall bind and
inure to the benefit of the respective parties hereto, and their respective
legal representatives, successors and assigns.
The gender and number used in this agreement are used as a reference
term only and shall apply with the same effect whether the parties are of the
masculine or feminine gender, corporate or other form, and the singular shall
likewise include the plural.
This agreement may not be changed orally.
IN WITNESS WHEREOF, the Parties have respectively signed and sealed
these presents the day and year first above written.
Ace Venture, Inc.
By: /s/ Dong Hyun Kang L.S.
----------------------------
Dong Hyun Kang, President L.S.
-------------------------------
General Credit Corp.
/s/ Gerald Nimberg L.S.
-------------------------------
By:
- --------------------------
Broker
STATE OF New York COUNTY OF New York ss.:
Dong Hyun Kang being duly sworn deposes and
says that: He is the President of Transferor:
The following is a true and complete list of: the existing creditors of the
Transferor, showing their business addresses and the amounts owed to each; the
names and addresses of all persons known to the Transferor who have asserted
claims which the Transferor disputes.
<PAGE> 4
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- ------------------------------------------------------------------------------------------------------
Creditor - indicate if a Claimant Business Address Amount - indicate if disputed
- ------------------------------------------------------------------------------------------------------
None at closing.
- -----------------------------------------------------------------------------------------------------
Sworn and subscribed to before me /s/ Dong Hyun Kang
-----------------------------
this 30th day of September 1997 Dong Hyun Kang
</TABLE>
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<PAGE> 5
SCHEDULE A
Property to be transferred
All the equipment, fixtures currently located at 499 Seventh Avenue,
North 704, NY, NY.
<PAGE> 6
CONTRACT
For Sale of Business
BULK SALE
UNIFORM COMMERCIAL CODE
---------------------------------------------------------
TO
----------------------------------------------------------
DATED:
----------------------------------------------------------
<PAGE> 1
EXHIBIT 10.2
PROMISSORY NOTE
Amount of Principal: $230,000.00
Date: September 30, 1997
FOR VALUE RECEIVED, GENERAL CREDIT CORPORATION, a New York corporation
with offices at 370 Lexington Avenue, Suite 2000, New York, New York 10017 (the
"Company"), hereby promises to pay to the order of DONG HYUN KANG, an
individual currently residing at 223B Crescent Lane, Cliffside Park, New Jersey
07010, or a holder of this Note (the "Holder") the principal sum of $230,000.00
at the Holder's address or such other address as the Holder may provide for
such purpose as follows:
1. Basic Terms:
(a) This Note (the "Note") shall bear interest at the rate of 10% per
annum. Principal and interest shall be paid monthly commencing November 15,
1997 and each month thereafter on or before the 1st day of each and every
succeeding month in 72 equal monthly payments of $4,260.93 (the "Monthly
Payment"). There shall be no prepayment penalty under this Note.
(b) In the event the check factoring service business located at 499
Seventh Avenue, North 704, New York, New York fails to gross an average of
$1,800,000.00 per week for the six month commencing October 15, 1997 to April
14, 1998 (the "6-Month Minimum Weekly Average Sales Amount"), then the payments
due under this Note shall be reduced proportionateley by the percentage of the
shortage amount in relation to the 6-Month Minimum Weekly Average Sales Amount
(the "Shortage Percentage").
For the purpose of calculating the amount of reduction (the "Reduction
Amount"), the Shortage Percentage shall be multiplied by $480,000 and the
Reduction Amount shall be set off against the Company's payment obligation in
the inverse order of its maturity under this Note and a promissory note issued
by the Company to the order of Sue Yi. As a way of example, let's assume that
the 6-Month Minimum Weekly Average Sales Amount is $1,7000,000. The difference
between the 6-Month Minimum weekly Average Sales Amount and the actual weekly
average sales amount is $100,000, which is 5.5% of the 6-Month Minimum Weekly
Average Sales Amount. Then, the payments due under this Note and the promissory
note issued to Sue Yi shall be reduced by 5.5% of $480,000, which is $26,400,
which amount will be set off against the Company's payment obligations on the
72nd month, 71st month, 70th month and a partial set off on the 69th month.
The above reduction in the Company's payment obligations, however, is
specifically conditioned upon the following events:
(i) The Company shall operate a check factoring service
business at 499 Seventh Avenue, North 704, New York, New York (the "Site") for
a period covering from October 15, 1997 to March 15, 1998 and its business
hours shall be from 9:30 a.m. to 6:30 p.m. from Monday through Friday; and
<PAGE> 2
(ii) The Company shall at all times provide the business with
a sufficient amount of capital during the said period in order that the Holder
may purchase any and all checks he wishes to purchase on behalf of the Company;
(iii) The Holder shall have the full authority to conduct the
day-to-day business at the Site, including the decision to purchase any checks
offered for sale; and
(iv) The fee(s) collected by the Company for factoring a
check shall not exceed the competitive market rate.
In the event the Company fails to fully satisfy any of the
above-mentioned four conditions, then for the purpose of this Note it shall be
automatically presumed that the Holder has fully complied with the 6-Month
Minimum Weekly Average Sales Amount requirement.
For the purpose of calculating the Weekly Average Sales Amount, the
following formula shall be used:
First, add the gross sales amount generated from the
Site from October 15, 1997 to April 14, 1998.
Then, subtract from the gross sales the total amount
of the bad debts generated from the Site during the
same period, but excluding: (i) any and al losses
arising out of due to theft or errors committed by
the Company's employees; and (ii) any and all bad
debts arising out of the checks dishonored by the
paying bank 30 days or thereafter from the date the
Holder purchases such check on behalf of the
Company.
Then, divide the end figure by 26.
2. Collateral:
This Note is an unsecured, general obligation of the Company.
3. Notices:
Any demand or notice made or given by the Holder or the Company in
connection herewith shall be made upon or given to the other party by
registered or certified mail, return receipt requested; postage prepaid.
4. Default:
In the event the Holder does not receive the full amount of the
Monthly Payment on or before 25th day of each month, then the Company shall be
in default. In the event of such default, (i) the
<PAGE> 3
Company shall pay a late charge in the amount of 8% of the overdue amount; and
(ii) Holder may declare the entire unpaid overdue amount; and (ii) Holder may
declare the entire unpaid balance of this Note immediately due and payable (the
"Accelerated Amount"), in which event, the Company shall immediately pay the
full amount of the Accelerated Amount.
The Company shall also be responsible to pay all costs, including
attorney's fees, and expenses incurred by the Holder in enforcing his, her or
its rights under this Note.
In the event the Company's default occurs prior to March 15, 1998 and
the Holder accelerates the Company's obligation under this Note, then any
reduction in the Company's obligation under Section 1(b) of this Note shall not
be applicable and the Holder shall be entitled to the full amount of the
Accelerated Amount.
5. Waivers and Consents:
The Company and any guarantor, sureby or endorser, and all others who
are, or who may become, liable for the payment hereof:
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all of the notices in connection with te delivery, acceptance, performance,
default or enforcements of the payment of this Note;
(b) expressly consent to all extensions of time, renewals,
postponements of time of payment of this Note or other modifications hereof,
from time to time, prior to or after the day that they become due, without
notice, consent or consideration to any foregoing;
(c) expressly agree to any substitution, exchange, addition or release
of any party or person primarily or secondarily liable hereon;
(d) expressly agree that the Holder shall not be required first to
institute any suit or to exhaust his, her or its remedies against the
undersigned or any other person or party liable hereunder in order to enforce
the payment of this Note; and
(e) expressly agree that, notwithstanding the occurrence of any of the
foregoing, the Company shall be and remain directly and primarily liable for
all sums due under this Note.
6. Jurisdiction:
In the event of any action or proceeding concerning this Note the
Company hereby:
(a) waives the right to a trial by jury, to the extent permitted by
law; and
(b) consents to the jurisdiction of the courts of the State of New
York and of any Federal Court located in such state in connection with any such
action or proceeding.
<PAGE> 4
7. Governing Law:
This Note shall be governed by and construed according to the laws of
the State of New York. No payment of interest or other sum construed to be
interest or charges in the nature of interest shall exceed the highest lawful
contract rate permissible under the laws of the State of New York. Therefore,
this Note and all agreements between the Holder and the Company are limited so
that in no contingency or event whatsoever, whether acceleration of maturity of
the indebtedness or otherwise, shall the amount paid or agree to be paid to the
Holder for the use, forbearance, or dentetion of the money advanced hereunder
exceed the highest lawful rate permissible under the laws of the State of New
York. If, under any circumstances whatsoever, fulfillment of any provision
hereof, at the time of performance of such provision shall be due, shall
involve the payment of interest in excess of that authorized by New York law,
the obligation to be fulfilled shall be reduced to the limit so authorized by
law, and if under any circumstances the Holder shall ever receive as interest
an amount that would exceed the highest lawful rate, the amount that would be
excessive shall be either applied to the reduction of the unpaid principal
balance of the indebtedness, and the Holder shall not be subject to any penalty
provided for the contracting for, charging, or receiving interest in excess of
the maximum lawful rate regardless of when or the circumstances under which
said refund or application was made.
IN WITNESS WHEREOF, the Company has executed this instrument on
September 30, 1997.
GENERAL CREDIT CORPORATION
By: /s/ Gerald Nimberg
--------------------------------
Name: Gerald Nimberg
Title: President
[corporate seal]
Attest:
By: /s/ Greg Ronan
---------------------
<PAGE> 1
EXHIBIT 10.3
PROMISSORY NOTE
Amount of Principal: $150,000.00
Date: September 30, 1997
FOR VALUE RECEIVED, GENERAL CREDIT CORPORATION, a New York corporation
with offices at 370 Lexington Avenue, Suite 2000, New York, New York 10017 (the
"Company"), hereby promises to pay to the order of SUE YI, an individual
currently residing at 223B Crescent Lane, Cliffside Park, New Jersey 07010, or
a holder of this Note (the "Holder") the principal sum of $150,000.00 at the
Holder's address or such other address as the Holder may provide for such
purpose as follows:
1. Basic Terms:
(a) This Note (the "Note") shall bear interest at the rate of 10% per
annum. Principal and interest shall be paid monthly commencing November 15,
1997 and each month thereafter on or before the 1st day of each and every
succeeding month in 72 equal monthly payments of $2,778.87 (the "Monthly
Payment"). There shall be no prepayment penalty under this Note.
(b) In the event the check factoring service business located at 499
Seventh Avenue, North 704, New York, New York fails to gross an average of
$1,800,000.00 per week for the six month commencing October 15, 1997 to April
14, 1998 (the "6-Month Minimum Weekly Average Sales Amount"), then the payments
due under this Note shall be reduced proportionateley by the percentage of the
shortage amount in relation to the 6-Month Minimum Weekly Average Sales Amount
(the "Shortage Percentage").
For the purpose of calculating the amount of reduction (the "Reduction
Amount"), the Shortage Percentage shall be multiplied by $480,000 and the
Reduction Amount shall be set off against the Company's payment obligation in
the inverse order of its maturity under this Note and a promissory note issued
by the Company to the order of DONG HYUN KANG. As a way of example, let's
assume that the 6-Month Minimum Weekly Average Sales Amount is $1,7000,000. The
difference between the 6-Month Minimum weekly Average Sales Amount and the
actual weekly average sales amount is $100,000, which is 5.5% of the 6-Month
Minimum Weekly Average Sales Amount. Then, the payments due under this Note and
the promissory note issued to Dong Hyun Kang shall be reduced by 5.5% of
$480,000, which is $26,400, which amount will be set off against the Company's
payment obligations on the 72nd month, 71st month, 70th month and a partial set
off on the 69th month.
The above reduction in the Company's payment obligations, however, is
specifically conditioned upon the following events:
(i) The Company shall operate a check factoring service
business at 499 Seventh Avenue, North 704, New York, New York (the "Site") for
a period covering from October 15, 1997 to March 15, 1998 and its business
hours shall be from 9:30 a.m. to 6:30 p.m. from Monday through
<PAGE> 2
Friday; and
(ii) The Company shall at all times provide the business with
a sufficient amount of capital during the said period in order that Dong Hyun
Kang may purchase any and all checks he wishes to purchase on behalf of the
Company;
(iii) Dong Hyun Kang shall have the full authority to conduct
the day-to-day business at the Site, including the decision to purchase any
checks offered for sale; and
(iv) The fee(s) collected by the Company for factoring a
check shall not exceed the competitive market rate.
In the event the Company fails to fully satisfy any of the
above-mentioned four conditions, then for the purpose of this Note it shall be
automatically presumed that the Holder has fully complied with the 6-Month
Minimum Weekly Average Sales Amount requirement.
For the purpose of calculating the Weekly Average Sales Amount, the
following formula shall be used:
First, add the gross sales amount generated from the
Site from October 15, 1997 to April 14, 1998.
Then, subtract from the gross sales the total amount
of the bad debts generated from the Site during the
same period, but excluding: (i) any and al losses
arising out of due to theft or errors committed by
the Company's employees; and (ii) any and all bad
debts arising out of the checks dishonored by the
paying bank 30 days or thereafter from the date the
Holder purchases such check on behalf of the
Company.
Then, divide the end figure by 26.
2. Collateral:
This Note is an unsecured, general obligation of the Company.
3. Notices:
Any demand or notice made or given by the Holder or the Company in
connection herewith shall be made upon or given to the other party by
registered or certified mail, return receipt requested; postage prepaid.
4. Default:
<PAGE> 3
In the event the Holder does not receive the full amount of the
Monthly Payment on or before 25th day of each month, then the Company shall be
in default. In the event of such default, (i) the Company shall pay a late
charge in the amount of 8% of the overdue amount; and (ii) Holder may declare
the entire unpaid overdue amount; and (ii) Holder may declare the entire unpaid
balance of this Note immediately due and payable (the "Accelerated Amount"), in
which event, the Company shall immediately pay the full amount of the
Accelerated Amount.
The Company shall also be responsible to pay all costs, including
attorney's fees, and expenses incurred by the Holder in enforcing his, her or
its rights under this Note.
In the event the Company's default occurs prior to March 15, 1998 and
the Holder accelerates the Company's obligation under this Note, then any
reduction in the Company's obligation under Section 1(b) of this Note shall not
be applicable and the Holder shall be entitled to the full amount of the
Accelerated Amount.
5. Waivers and Consents:
The Company and any guarantor, sureby or endorser, and all others who
are, or who may become, liable for the payment hereof:
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this Note,
and all of the notices in connection with te delivery, acceptance, performance,
default or enforcements of the payment of this Note;
(b) expressly consent to all extensions of time, renewals,
postponements of time of payment of this Note or other modifications hereof,
from time to time, prior to or after the day that they become due, without
notice, consent or consideration to any foregoing;
(c) expressly agree to any substitution, exchange, addition or release
of any party or person primarily or secondarily liable hereon;
(d) expressly agree that the Holder shall not be required first to
institute any suit or to exhaust his, her or its remedies against the
undersigned or any other person or party liable hereunder in order to enforce
the payment of this Note; and
(e) expressly agree that, notwithstanding the occurrence of any of the
foregoing, the Company shall be and remain directly and primarily liable for
all sums due under this Note.
6. Jurisdiction:
In the event of any action or proceeding concerning this Note the
Company hereby:
(a) waives the right to a trial by jury, to the extent permitted by
law; and
<PAGE> 4
(b) consents to the jurisdiction of the courts of the State of New
York and of any Federal Court located in such state in connection with any such
action or proceeding.
7. Governing Law:
This Note shall be governed by and construed according to the laws of
the State of New York. No payment of interest or other sum construed to be
interest or charges in the nature of interest shall exceed the highest lawful
contract rate permissible under the laws of the State of New York. Therefore,
this Note and all agreements between the Holder and the Company are limited so
that in no contingency or event whatsoever, whether acceleration of maturity of
the indebtedness or otherwise, shall the amount paid or agree to be paid to the
Holder for the use, forbearance, or dentetion of the money advanced hereunder
exceed the highest lawful rate permissible under the laws of the State of New
York. If, under any circumstances whatsoever, fulfillment of any provision
hereof, at the time of performance of such provision shall be due, shall
involve the payment of interest in excess of that authorized by New York law,
the obligation to be fulfilled shall be reduced to the limit so authorized by
law, and if under any circumstances the Holder shall ever receive as interest
an amount that would exceed the highest lawful rate, the amount that would be
excessive shall be either applied to the reduction of the unpaid principal
balance of the indebtedness, and the Holder shall not be subject to any penalty
provided for the contracting for, charging, or receiving interest in excess of
the maximum lawful rate regardless of when or the circumstances under which
said refund or application was made.
IN WITNESS WHEREOF, the Company has executed this instrument on
September 30, 1997.
GENERAL CREDIT CORPORATION
By: /s/ Gerald Nimberg
------------------------
Name: Gerald Nimberg
Title: President
[corporate seal]
Attest:
By: /s/ Greg Ronan
--------------------
<PAGE> 1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
AGREEMENT, made as of October 15, 1997 by and between GENERAL CREDIT
CORP., a New York corporation with its offices at 370 Lexington Avenue, Suite
2000, New York, New York 10017 (the "Company"), and DONG HYUN KANG, an
individual currently residing at 223B Crescent Lane, Cliffside Park, New Jersey
07010 (the "Employee").
The parties hereto, in consideration of the premises and mutual
covenants herein contained, hereby agree as follows:
1. Employment: The Company hereby agrees to employ the Employee as
the General Manager of Sales and the Employee hereby accepts such appointment
on the terms and conditions hereinafter set forth.
2. Duties: The employee shall be General Manager of Sales in New York
and New Jersey (the "Territory"). The Employee shall have the authority to hire
and fire any sales or customer relations employees of the Company working at
his site(s). The Employee shall be subject to reasonable direction of the
President of the Company.
3. Company's Business: The Company is in the check factoring service
business and is currently operating such business at 499 Seventh Avenue, North
704, New York, New York (the "Site"). It is the Company's plan to open up one
additional site in the Territory in 1998 and one other site in the Territory in
1999, both of which targeting the Asian market. The Employee shall be in charge
of operating and managing the day-to-day business at the three sites (the Site
and the additional two new sites to be open in the Territory). In the event the
Company wishes the Employee to manage more than three sites, then it shall be
done only with the consent of the Employee. For each site, the Company shall
provide, a sufficient number of uniformed and non-uniformed guards and armored
and non-armored vehicles as requested by the Employee.
4. Company's Covenants and Warranties: The Company covenants and
warrants that during the term of this Agreement:
(i) It will provide the Site and other sites the Employee are in
charge of with the sufficient amount of capital at all times in order that the
Employee may purchase any and all checks he wants to purchase on behalf of the
Company. For the Site, the Company shall supply at least $1.5 million per day.
Upon opening of other site(s), the amount of capital the Company is required to
supply to the Employee per day shall be increased and fixed by and between the
parties. On each Friday, the Employee shall provide the Company with an
estimate of the monies required for purchasing checks for the following week.
In the event the monies requested by the Employee for any week will be more
than 110% of the monies provided by the Company in the immediately preceding
week, then the Employee shall provide the Company with a two-week prior notice.
(ii) It will continue to operate a check factoring business at 499
Seventh Avenue, North 704, New York, New York with business hours from 9:30
a.m. to 6:30 p.m. from Monday through Friday;
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(iii) The Employee shall have the full authority to conduct the
day-to-day business at the Site and two other sites in the Territory, including
the decision to purchase any checks offered for sale; and
(iv) The fee collected by the Company for factoring a check shall not
exceed the competitive market rate.
5. Employee's Covenants and Warranties: The Employee covenants and
warrants that during the term of this Agreement he will not purchase any checks
made payable to an individual without the prior consent of the Company.
6. Base Salary: During the term of this Agreement, the Employee shall
receive from the Company a compensation at the rate of $2,500.00 per week,
which shall be increased each year at the increment of 5% or CPI, whichever is
greater,
7. Bonuses: In addition to the base salary set forth above, the
Employee shall be entitled to receive the following bonuses from the Company:
(i) First Bonus: $30,000 per year if the Weekly Average Sales Amount
(as hereinbelow defined) is equal to or greater than $2.1 million; and
(ii) Second Bonus: $50,000 per year if the Weekly Average Sales Amount
is equal to or greater than $2.6 million; and
(iii) Third Bonus: $70,000 per year if the Weekly Average Sales Amount
is equal to or greater than $3.1 million; and
(iv) Fourth Bonus: $90,000 per year if the Weekly Average Sales Amount
is equal to or greater than $3.6 million.
(b) For the purpose of calculating the Weekly Average Sales Amount,
the following formula shall be used:
(i) Add the annual sales amount from October 15 to October 14 from
each site at which the Employee is in charge (the "Total Annual Sales"); then
(ii) Subtract from the Total Annual Sales the Net Bad Debt (as defined
hereinbelow) from each site at which the Employee is in charge (The amount
equal to the "Total Annual Sales" less "Net Bad Debt" shall hereinafter be
defined as the "Net Annual Sales"); then
(iii) Divide the Net Annual Sales by 52 (the "Weekly Average Sales
Amount").
(c) For the purpose of calculating the Net Bad Debt, the following
formula shall be used;
(i) Add the total amount of the checks which are purchased by the
Company at the sites
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managed by the Employee and dishonored by the paying bank and remain
uncollected as of October 14 each year; then
(ii) Add, if there are any losses arising out of robberies during the
same period while the monies are en route to a customer, the amount lost in
each such robbery less $15,000 if such robbery took place while the monies were
being delivered by one delivery person, and $40,000 if such robbery took place
while the monies were being delivered by two delivery persons.
(ii) Subtract any and all losses arising out of or due to theft or
errors committed by the employees of the Company; then
(iii) Subtract any and all bad debts arising out of the checks
dishonored by the paying bank 30 days or thereafter from the date of the
purchase of such check by the Company; then
(iv) Subtract any and all bad debt costs paid for by the Employee
pursuant to the term of the Contract for Sale and Purchase dated September 30,
1997 and entered by and between Ace Venture, Inc., as seller, and the Company,
as buyer.
(d) The Employee's bonus may be reduced by the Company under the
following circumstance:
(i) The First Bonus may be reduced by the amount equal to the
difference between the Net Bad Debt and $45,000 if the Net Bad Debt for such
year is greater than $45,000;
(ii) The Second Bonus may be reduced by the amount equal to the
difference between the Net Bad Debt and $55,000 if the Net Bad Debt for such
year is greater than $55,000;
(iii) The Third Bonus may be reduced by the amount equal to the
difference between the Net Bad Debt and $65,000 if the Net Bad Debt for such
year is greater than $65,000;
(iv) The Fourth Bonus may be reduced by the amount equal to the
difference between the Net Bad Debt and $75.000 if the Net Bad Debt for such
year is greater than $75,000.
$45,000, $55,000, $65,000 and $75,000 shall hereinafter be defined as
the "Bad Debt Ceilings."
(e) In no event, however, the Employee shall be responsible to pay for
any bad debt generated during the course of managing the Company's business.
The Employee's responsibility with respect to the bad debts shall be solely
limited to the possible reduction of bonuses he may otherwise be entitled to as
set forth above.
(f) The bonuses shall be given to the Employee on or before October 25
of each applicable year.
(g) In the event the Employee is not qualified to receive a bonus or
fails to qualify for a bigger
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bonus in any given year because the Net Bad Debt for such year exceeds a Bad
Debt Ceiling but such bad debt is collected subsequent to October 14, then the
Net Bad Debt shall be reduced by the amount collected and the amount of the
bonus the employee is entitled to shall be readjusted based on the new amount
of the Net Bad Debt.
8. Employee Expenses. The Company shall give to the Employee an
expense allowance in the fixed amount of $750.00 per month for gas, auto
insurance and parking expenses. Said allowance shall be increased by 5% per
year.
9. Vacation. The Employee shall be entitled to a 4-week paid vacation
time per year.
10. Term. This Agreement shall be valid for a period of Ten (10)
years commencing October 15, 1997, unless earlier terminated by the terms of
this Agreement.
11. Medical Insurance. The Company shall provide for the Employee, his
spouse and family dependents a medical insurance reasonably satisfactory to the
Employee.
12. Death or Inability During Employment. If the Employee dies or
becomes permanently or totally disabled during the term of this Agreement, the
Company shall pay to the Employee the base salary which would otherwise be
payable to the Employee, for a period of twelve (12) months after the date on
which the Employee's death or disability occurred.
13. Minimum Quota. (a) On the express condition that the Company
satisfies all of the conditions set forth in Section 4 of this Agreement, the
Employee shall be responsible for each year for generating a Weekly Average
Sales Amount of not less than $1.8 million (the "Minimum Quota").
(b) In the event, however, the Company breaches any of the conditions
set forth in Section 4 of this Agreement or fails to furnish the amount of
capital requested by the Employee on five (5) separate occasions per year, then
it shall be automatically presumed that the Employee had generated $3.6 million
as the Weekly Average Sales Amount for such year for the purposes of this
Section and calculating the Employee's bonus. In the event the Company fails to
supply the whole amount of capital requested by the Employee and the Employee
fails to fully utilize such lesser sum delivered by the Company, then the
Company's failure to supply the full amount requested by the Employee shall not
be deemed a breach.
(c) In the event, the Employee fails to meet the Minimum Quota in any
given year for no fault of the Company, then the Company and the Employee shall
renegotiate in good faith to adjust the base salary and the bonus.
14. Governing Law. This Agreement shall be construed pursuant to the
laws of the State of New York.
15. Captions. Paragraph titles or captioned contained in this
Agreement are inserted only as matter of convenience and/or reference, and they
shall in no way be construed as limiting, extending,
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defining or describing either the scope or intent of this Agreement or of any
provision hereof.
16. Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersedes all prior agreements with respect to the subject matter of this
Agreement. No modifications, amendments or waivers of any of the provisions of
this agreement shall be effective unless made in writing and signed by both
parties.
17. Confidentiality. The Employee acknowledges that the information
and data obtained by him while employed by the Company concerning the business
or affairs of the Company, or any subsidiary of the Company (the "Confidential
Information") are the property of the Company or such subsidiary. Therefore,
the Employees agrees that he shall not during the term of this Agreement
disclose to any unauthorized person or use his own account any Confidential
Information without the prior written contract of the Company. Upon termination
of this Agreement or termination of the Employee's employment of the Company,
however, the Employee may use the information on the Company's customers at the
Site and other sites managed by the Employee for his own benefit and use.
18. Attorney's Fees. In the event that either party shall be required
to retain the services of an attorney to enforce any of his or its rights
hereunder, the prevailing party in any arbitration or court action shall be
entitled to receive from the other party all costs and expenses including the
court costs and attorneys' fees incurred by his or it in connection therewith,
19. Amendment. This Agreement may not be amended, modified,
superseded, canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived, except by a
written instrument executed by the Company and the Employee or, in the case of
a waiver, by the party to be charged with such waiver.
20. Definition. The term "year" as used in this Agreement shall be
defined as the year commencing October 15 and ending October 14.
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IN WITNESS WHEREOF, the Company and the Employee caused this agreement
to be executed as of the day and year first above written.
THE COMPANY
GENERAL CREDIT CORP.
By: /s/ Gerald Nimberg
-----------------------------
Name: Gerald Nimberg
Title: President
EMPLOYEE
DONG HYUN KANG
/s/ Dong Hyun Kang
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