Exhibit 10.2
THIRD AMENDED AND RESTATED
REVOLVING PROMISSARY NOTE
$3,500,000 June 6, 1997
For value received, the undersigned, FARMSTEAD TELEPHONE GROUP,
INC., a Delaware corporation ("Maker"), promises to pay to FIRST UNION
BANK OF CONNECTICUT (SUCCESSOR-IN-INTEREST TO AFFILIATED BUSINESS CREDIT
CORPORATION), or order ("Lender") at its office at 000 Xxxxxx Xxxxxx, Xxx
Xxxxx, Xxxxxxxxxxx 00000, or at such other place as the holder hereof
(including Lender, hereinafter referred to as "Holder") may designate, the
sum of up to THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000),
together with interest on the unpaid balance of this Note, beginning as
of the date hereof, before or after maturity or judgment, at the rate of
one half of one percentage point (.5%) per annum above the Prime Rate on a
floating basis, which rate shall be computed daily and payable monthly in
arrears on the basis of a Three Hundred Sixty (360) day year and actual
days elapsed, together with all taxes levied or assessed on this Note or
the debt evidenced hereby against the Holder, and together with all costs,
expenses and attorneys' and other professional fees incurred in any action
to collect this Note or to enforce, preserve, realize or foreclose any
mortgage, security agreement or other agreement securing this Note or to
preserve, enforce, protect or sustain the lien of said mortgage, security
agreement or other agreement or in any litigation or controversy arising
from or connected with said mortgage, security agreement or other
agreement or this Note. The term "Prime Rate" as used herein shall mean
that rate announced by the Lender from time to time as its Prime Rate and
is one of several interest rate bases used by Lender. Lender lends at
rates both above and below Lender's Prime Rate, and Maker acknowledges
that Xxxxxx's Prime Rate is not represented or intended to be the lowest
or most favorable rate of interest offered by Xxxxxx. Any change in the
interest rate because of a change in the Prime Rate shall become
effective, without notice or demand, immediately following any change in
the Prime Rate.
The principal amount of this Note shall be advanced, at the sole
discretion of Holder, pursuant to a Commercial Revolving Loan and Security
Agreement between Maker and Lender dated June 5, 1995, as amended by
letter agreements between Maker and Lender dated March 11, 1996, May 1,
1996, September 6, 1996 and of even date herewith (collectively, the
"CRLSA") and is subject in all respects to the terms and conditions of the
CRLSA, including, but not limited to, the repayment terms and the
termination date set forth in the CRLSA. Advances and payments on this
Note may be evidenced by borrowing certificates, a grid (if any) attached
to this Note or similar certificates or documents, or by an internal
ledger account of Lender which shall set forth, among other things, the
principal amount of any advances and payments thereof. Interest shall be
paid on the first business day of each and every month commencing on July
1, 1997. Holder may, in its sole discretion, charge any amounts due
hereunder to Maker's revolving loan account maintained with Holder
pursuant to the CRLSA.
Maker agrees that (i) if any installment of interest, principal or
other sum due hereunder is not paid when it is due under this Note, the
CRLSA or under any instrument evidencing any other obligation of Maker to
Holder; or (ii) if Maker or Holder shall terminate the CRLSA; or (iii) if
Maker or any guarantor of any obligation of Maker hereunder shall make an
assignment for the benefit of creditors or suffer or permit the
appointment of a receiver for any part of its property or suffer or permit
the filing by or against it of any petition for ajudication, arrangement,
reorganization or the like under any bankruptcy or insolvency law; or (iv)
if an Event or Default shall occur under the CRLSA or any mortgage,
security agreement or any other agreement securing this Note, any other
note by maker to Holder, or in the performance of any other obligation to
Holder or any other entity or person; or (v) if there shall be any
material adverse change from the present condition or affairs (financial
or otherwise) of Maker or any of the guarantors of the obligations of
Maker, that in Holder's reasonable opinion materially impairs its security
or increases its risk; then an Event of Default shall have occurred
hereunder and, upon the happening of any such event, the entire
indebtedness with accrued interest thereon due under this Note shall, at
the option of Holder, be immediately due and payable without notice.
Failure to exercise such option shall not constitute a waiver of the right
to exercise the same in the event of any subsequent default. Upon the
occurrence and during the continuance of such an Event of Default, the
interest rate on this Note shall automatically increase without notice to
a floating per annum rate equal to two percentage points (2.0%) above the
rate otherwise in effect hereunder.
In the event of Maker's failure to pay any installment of interest
and/or to pay any other sum due hereunder or under the CRLSA for more than
ten (10) days after the date it is due and payable, without in any way
affecting Xxxxxx's right to declare an event of default to have occurred,
a late charge equal to five Percent (5%) of such late payment shall be
assessed against Maker and shall be due and payable immediately.
Notwithstanding any provisions of this Note, it is the understanding
and agreement of Maker and Holder (and any guarantors of Maker's
liabilities) that the maximum rate of interest to be paid by Maker (or
guarantors of Maker's liabilities) to Holder shall not exceed the highest
or the maximum rate of interest permissible to be charged by a commercial
lender such as Lender to a commercial borrower such as Maker under the
laws of the State of Connecticut. Any amount paid in excess of such rate
shall be considered to have been payments in reduction of principal.
Maker, and each and all guarantors of this Note hereby give Holder a
lien and right of setoff for all Maker's liabilities upon and against all
the deposits, credits, collateral and property of Maker and guarantors,
now or hereafter in the possession or control of Holder or in transit to
it. Holder may, upon the occurrence of an event of default hereunder or
upon demand for payment of any demand indebtedness owing from Maker to
Holder, apply or set off the same, or any part thereof, to any liability
of Maker even though unmatured.
Failure by Holder to insist upon the strict performance by Maker of
any terms and provisions herein shall not be deemed to be a waiver of any
terms and provisions herein shall not be deemed to be a waiver of any
terms and provisions herein, and Xxxxxx shall retain the right thereafter
to insist upon strict performance by Maker of any and all terms and
provisions of this Note or any document securing the repayment of this
Note.
MAKER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT,
ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY
WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS NOTE IS A PART
AND/OR THE ENFORCEMENT OF ANY OF HOLDER'S RIGHTS AND REMEDIES, INCLUDING
WITHOUT LIMITATION, TORT CLAIMS. MAKER ACKNOWLEDGES THAT IT MAKES THIS
WAIVER KNOWLINGLY, VOLUNTARILY AND WITHOUT DURESS AND ONLY AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
MAKER FURTHER ACKNOWLEDGES THAT XXXXXX HAS NOT AGREED WITH OR REPRESENTED
TO MAKER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
MAKER AND EACH AND ALL GUARANTORS OF THIS NOTE ACKNOWLEDGE THAT THE
LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL TRANSACTION AND WAIVES ITS
RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT
TO ANY PREJUDGMENT REMEDY WHICH HOLDER MAY DESIRE TO USE, AND FURTHER
WAIVES ITS RIGHTS TO REQUEST THAT HOLDER POST A BOND, WITH OR WITHOUT
SURETY, TO PROTECT SAID MAKER AGAINST DAMAGES THAT MAY BE CAUSED BY ANY
PREJUDGMENT REMEDY SOUGHT OR OBTAINED BY HOLDER. Maker further, waive
diligence, demand, presentment for payment, notice of nonpayment, protest
and notice of protest, and notice of any renewals or extensions of this
Note, and all rights under any statute of limitations, and all guarantors
agree that the time for payment of this Note may be extended at Holder's
sole discretion, without impairing their liability thereon, and further
consent to the release of all or any part of the security for the payment
hereof, at the discretion of Holder, or the release of any party liable
for this obligation without affecting the liability of the other parties
hereto. MAKER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWLINGLY,
VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS. MAKER FURTHER
ACKNOWLEDGES THAT XXXXXX HAS NOT AGREED WITH OR REPRESENTED TO MAKER THAT
THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut (but not its conflicts of law
provisions).
FARMSTEAD TELEPHONE GROUP, INC.
By: /s/ Xxxxxx X. XxXxxxx
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Its Vice President
