EXHIBIT 10.42
NOTE
$5,000,000.00 Boston, Massachusetts
February 27, 1998
FOR VALUE RECEIVED, KOPIN CORPORATION, a Delaware corporation ("Borrower"),
hereby promises to pay to the order of The Sumitomo Bank, Limited, a Japanese
banking corporation ("Bank"), without counterclaim, offset or deduction, the
principal sum of FIVE MILLION DOLLARS ($5,000,000) or, if less, the aggregate
unpaid principal amount of all Disbursements (as defined in the Loan Agreement
referred to below), in accordance with the terms of the Loan Agreement and to
pay interest on the outstanding principal balance at the interest rates and at
such times provided in the Loan Agreement and elected by Xxxxxxxx and calculated
in accordance with the terms of Loan Agreement. This Note is the Note referred
to in the Loan Agreement, of even date herewith, between Borrower and Bank, and
is subject to all of the terms and conditions of the Loan Agreement (which are
incorporated herein by reference), including the rights of prepayment and the
rights of acceleration of maturity. Terms used herein have the meanings
assigned to those terms in the Loan Agreement, unless otherwise defined herein.
The unpaid principal balance hereunder shall be paid in twenty (20) equal
consecutive quarterly installments of principal (each installment being in an
amount sufficient to amortize the outstanding principal balance of the Loan over
a period of twenty (20) quarters, together with interest on the unpaid principal
balance commencing from the Closing Date, payable on the first Business Day of
each calendar quarter commencing with the first payment due on April 1, 1998 and
continuing until December 31, 2002 (the "Maturity Date"), on which date Borrower
shall make a final payment in an amount equal to all of the then unpaid
principal of the Loan and all unpaid interest thereon, provided, however, that
repayment of any or all of the outstanding principal balance hereunder and all
accrued and unpaid interest thereon may be accelerated by Bank as hereinafter
provided upon the occurrence of any failure to make any payment required under
this Note and/or any Event of Default under the Loan Agreement. Any installment
of interest only or of principal and interest paid more than five (5) days late
or any other amount payable hereunder which is not paid when due will bear (and
Borrower shall pay) interest (to the extent permitted by law) from such due date
until such unpaid amount has been paid in full (whether before or after
judgment) at a rate per annum equal to the Default Rate.
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Borrower hereby authorizes Bank to record on schedule(s) annexed to this Note
(a) the date and amount of each portion of the Loan which constitutes a
Eurodollar Rate Loan Portion or Prime Rate Loan Portion; (b) the term of the
Interest Period for the Eurodollar Rate Loan Portion; (c) the interest rate or
rates for each Eurodollar Rate Loan Portion or Prime Rate Loan Portion and the
effective date(s) of all changes in such rates; (d) the date and amount of each
interest only payment on each Eurodollar Rate Loan Portion or Prime Rate Loan
Portion; and (e) the date and amount of each principal and interest payment on
each Eurodollar Rate Loan Portion or Prime Rate Loan Portion and of each
prepayment of principal made by Xxxxxxxx, and Xxxxxxxx agrees that all such
notations shall constitute prima facie evidence of the matters noted. Bank's
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failure to record such information shall not reduce or affect the obligations of
Borrower hereunder or under the Loan Agreement.
Upon the occurrence of any failure to make a payment required under this Note
and/or any Event of Default under the Loan Agreement, Bank, at its option and
without further notice, demand, or presentment for payment to Borrower, may
declare immediately due and payable the unpaid principal balance and interest
accrued thereon together with all other sums owed by Borrower under this Note
and the Loan Documents (including, but not limited to attorneys' fees as
provided below), anything in this Note and the Loan Documents to the contrary
notwithstanding. Notwithstanding the foregoing, under certain circumstances as
provided in the Loan Agreement or under applicable law, the unpaid principal
balance and interest accrued thereon together with all other sums owed by
Borrower under this Note and the Loan Documents (including, but not limited to,
attorneys fees as provided below) shall automatically become due and payable.
Payment of such sums may be enforced and recovered in whole or in part at any
time by one or more of the remedies provided to Bank in this Note or the Loan
Documents. All amounts so accelerated under this Note or the Loan Documents, or
all such amounts that become due and payable on the Maturity Date but remain
unpaid, shall in each case (without need for further notice) bear interest from
the date of such acceleration or the Maturity Date, as applicable, until the
date such amounts are paid in full at a rate per annum equal to the Default
Rate.
Borrower shall make all payments hereunder in lawful money of the United
States and in immediately available funds to Bank's account by means of a wire
transfer addressed as follows: The Sumitomo Bank, Limited, Chicago Bank, ABA
000000000, through the
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Federal Reserve Bank of Chicago, Reference: Kopin Corporation. The computation
of interest hereunder shall be on the basis of a 360 day year, for actual days
elapsed.
All agreements between Borrower and Bank, whether now existing or hereafter
arising, are hereby limited so that in no event shall the interest charged
hereunder or under the Loan Agreement or any other charges hereunder or under
the Loan Agreement which may at any time be deemed to be interest or agreed to
be paid to Bank exceed the maximum amount permissible under applicable law.
Bank shall be entitled to amortize, prorate and spread throughout the full term
of this Note all interest paid or payable so that the interest paid does not
exceed the maximum amount permitted by law. In the event that the total
liability for payments of interest and payments in the nature of interest,
including without limitation, all charges, fees or other sums which may at any
time be deemed to be interest, shall for any reason whatsoever, result in an
effective rate of interest that for any interest payment period exceeds the
amount which Bank may lawfully collect, then the interest rate shall
automatically be reduced to the maximum rate permitted by law and all sums in
excess of those lawfully collectible as interest for the period in question
shall, without further notice to any party hereto, be applied as a premium-free
reduction of the principal balance, provided, however, that Bank may, at any
time, and from time to time, elect, by notice in writing to Borrower, to waive,
reduce or limit the collection of any sums (or refund to Borrower any sums
collected) in excess of those lawfully collectible as interest rather than
accept such sums as prepayment of the principal balance.
Borrower shall pay all reasonable fees, costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the preparation and negotiation
of this Note and the Loan Documents and in the enforcement or attempt to enforce
any of Xxxxxxxx's obligations hereunder not performed when due, whether or not
any legal action is actually filed, litigated or prosecuted to judgment of
award. This Note shall be governed by, construed and interpreted in accordance
with the laws of the Commonwealth of Massachusetts.
Time is of the essence in the performance of the obligations evidenced by this
Note. In the event that Borrower defaults under this Note, or an Event of
Default occurs under the Loan Agreement, Bank shall have all of the rights and
remedies provided for in any of the Loan Documents or at law or in equity. The
remedies of Bank shall be cumulative and may be exercised from time to time. No
failure on the part of Bank or the holder of the Note to exercise, and no delay
in exercising, any right
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shall operate as a waiver thereof, nor will any single or partial exercise of
any right preclude any other or future exercise thereof or the exercise of any
other right. Borrower hereby waives diligence, presentment for payment, demand,
notice of demand, notice of non-payment or dishonor, protest and notice of
protest of this Note, and all other notices in connection with the delivery,
acceptance, performance, default or enforcement of the payment of this Note,
except such notices as are required under the terms of any of the Loan
Documents.
If this Note is destroyed, lost or stolen, Borrower shall deliver a new note
to Bank on the same terms and conditions as this Note, with all appropriate
schedules annexed thereto, in substitution of the prior Note. Bank shall
furnish to Borrower reasonable evidence that the Note was destroyed, lost or
stolen, and any security or indemnity that may be reasonably required by
Borrower in connection with the replacement of the Note.
Executed as an instrument under seal as of the day and date referred to above.
KOPIN CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: CFO
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