EXHIBIT 10.2
COMMERCIAL/AGRICULTURAL
REVOLVING
NOTE-VARIABLE RATE
"LENDER": "BORROWER":
NORTHERN NATIONAL BANK Nortech Systems Incorporated
000 Xxxxx Xxxxxx 0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxxx, XX 00000
(000) 000-0000
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Officer Interest Principal Amount/ Funding/ Maturity Customer Loan
Initials Rate Credit Limit Agreement Date Date Number Number
-------- -------- ---------------- --------------- -------- -------- -------
BAS VARIABLE $1,500,000.00 12/31/96 6/30/98 533909
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PROMISE TO PAY
For value received, the undersigned Borrower promises to pay to the
order of Lender indicated above, the principal amount of One Million, Five
Hundred Thousand and No/100ths Dollars ($1,500,000.00) or, if less, the
aggregate unpaid principal amount of all loans or advances made by the Lender
to the Borrower, plus interest on the unpaid principal balance at the rate
and in the manner described below. All amounts received by Lender shall be
applied first to late payment charges and expenses, then to accrued interest,
and then to principal or in any other order as determined by Lender, in
Lender's sole discretion, as permitted by law.
LOAN AGREEMENT; INTEREST RATE: This Note evidences a loan or loans made
under, and is subject to acceleration as provided in, and the other terms and
conditions of, that certain Commercial Loan Agreement dated as of December 29,
1995, as amended by an Amendment to Loan Agreement dated as of November 4,
1996, and by a Second Amendment to Loan Agreement dated as of December 31,
1996, by and among Nortech Systems Incorporated, Nortech Medical Services,
Inc. and Northern National Bank (as the same may be amended, restated,
modified or supplemented from time to time, the "Loan Agreement"). Interest
on the principal amount hereunder remaining unpaid from time to time shall be
calculated at the rates set forth in Loan Agreement.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest
according to the following schedule:
Interest only payments beginning February 1, 1997, and continuing
at monthly time intervals thereafter. A final payment of the
unpaid principal balance plus accrued interest is due and payable
on June 30, 1998.
All payments will be made to First Bank National Association, a national
banking association, as provided in the Loan Agreement, and in lawful
currency of the United States of America.
RENEWAL: This Note is a renewal of loan number 533909 and is not in
payment of that Note.
SECURITY: To secure the payment and performance of obligations incurred
under this Note, Borrower grants Lender a security interest in, and pledges
and assigns to Lender all of Borrower's rights, title and interest, in all
monies, instruments, savings, checking and other deposit accounts of
Borrower's, (excluding XXX, Xxxxx and trust accounts and deposits subject to
tax penalties if so assigned) that are now or in the future in Lender's
custody or control. Upon default, and to the extend permitted by applicable
law, Lender may exercise any or all of its rights or remedies as a secured
party with respect to such property which rights and remedies shall be in
addition to all other rights and remedies granted to Lender including,
without limitation, Lender's common law right of setoff. The obligations
under this Note are also secured by a lien and/or security interest in the
property described in the documents executed in connection with this Note as
well as any other property designated as security now or in the future.
PREPAYMENT: This Note may be prepaid in part or in full on or before
its maturity date. If this Note contains more than one installment, all
prepayments will be credited as determined by Lender and as permitted by law.
If this Note is prepaid in full, there will be no prepayment penalty.
LATE PAYMENT CHARGE: If a payment is received more than ten (10) days
late, Borrower will be charged a late payment charge of 5.00% of the unpaid
late installment.
REVOLVING FEATURE: This Note possesses a revolving feature. Upon
satisfaction of the conditions set forth in this Note, Borrower shall be
entitled to borrow up to the full principal amount of the Note and to repay
and re-borrow from time to time during the term of this Note.
Lender shall maintain a record of the amounts loaned to and repaid by
Borrower under this Note. The aggregate unpaid principal amount shown on such
record shall be rebuttable presumptive evidence of the principal amount owing
and unpaid on this Note. The Lender's failure to record the date and amount
of any loan or advance shall not limit or otherwise affect the obligations of
the Borrower under this Note to repay the principal amount of the loans or
advances together with all interest accruing thereon. Lender shall not be
obligated to provide Borrower with a copy of the record on a periodic basis.
Borrower shall be entitled to inspect or obtain a copy of the record during
Lender's business hours.
CONDITIONS FOR ADVANCES: If there is no default under this Note,
Borrower shall be entitled to borrow monies or make draws under this Note
(subject to the limitations described above) under the conditions described
herein and in the Loan Agreement.
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GENERAL TERMS AND CONDITIONS. This Note is subject to the following
general terms and conditions:
GENERAL TERMS AND CONDITIONS
1. DEFAULT: Borrower will be in default under this Note in the event that
Borrower or any guarantor or any other third party: (a) fails to make
any payment on this Note or any other indebtedness to Lender when due;
(b) fails to perform any obligation or breaches any warranty or covenant
to Lender contained in this Note or any other present or future written
agreement regarding this or any indebtedness of Borrower to Lender; (c)
provides or causes any false or misleading signature or representation to
be provided to Lender; (d) allows the collateral securing this Note (if
any) to be lost, stolen, destroyed, damaged in any material respect, or
subjected to seizure or confiscation; (e) permits the entry or service
any garnishment, judgment, tax levy, attachment or lien against
Borrower, any guarantor, or any of their property or the Collateral; (f)
dies, becomes legally incompetent, is dissolved or terminated, ceases to
operate its business, becomes insolvent, makes an assignment for the
benefit of creditors, fails to pay debts as they become due, or becomes
the subject of any bankruptcy, insolvency or debtor rehabilitation
proceeding; or (g) causes Lender to deem itself insecure for any reason,
or Lender, for any reason, in good xxxxx xxxxx itself insecure.
2. RIGHTS OF LENDER ON DEFAULT: If there is a default under this Note,
Lender will be entitled to exercise one or more of the following remedies
without notice or demand (except as required by law): (a) to cease making
additional advances under this Note; (b) to declare the principal amount
plus accrued interest under this Note and all other present and future
obligations of Borrower immediately due and payable in full; (c) to
collect the outstanding obligations of Borrower with or without resorting
to judicial process; (d) to take possession of any collateral in any
manner permitted by law; (e) to require Borrower to deliver and make
available to Lender any collateral at a place reasonably convenient to
Borrower and Lender; (f) to sell, lease or otherwise dispose of any
collateral and collect any deficiency balance with or without resorting
to legal process; (g) to set-off Borrower's obligations against any
amounts due to Borrower including, but not limited to, monies,
instruments, and deposit accounts maintained with Lender; and (h) to
exercise all other rights available to Lender under any other written
agreement or applicable law. Lender's rights are cumulative and may be
exercised together, separately, and in any order. Lender's remedies under
this paragraph are in addition to those available at common law,
including, but not limited to, the right of set-off.
3. FINANCIAL INFORMATION: Borrower will provide Lender with current
financial statements and other financial information (including, but not
limited to, balance sheets and profit and loss statements) upon request.
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4. MODIFICATION AND WAIVER: The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a
writing signed by Lender. Lender may perform any of Borrower's
obligations or delay or fail to exercise any of its rights without
causing a waiver of those obligations or rights. A waiver on one occasion
will not constitute a waiver on any other occasion. Borrower's
obligations under this Note shall not be affected if Lender amends,
compromises, exchanges, fails to exercise, impairs or releases any of the
obligations belonging to any co-borrower or guarantor or any of its
rights against any co-borrower, guarantor or collateral.
5. SEVERABILITY AND INTEREST LIMITATION: If any provision of this Note is
invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. Notwithstanding anything contained in this
Note to the contrary, in no event shall interest accrue under this Note,
before or after maturity, at a rate in excess of the highest rate
permitted by applicable law, and if interest (including any charge or fee
held to be interest by a court of competent jurisdiction) in excess
thereof be paid, any excess shall constitute a payment of, and be applied
to, the principal balance hereof, and if the principal balance has been
fully paid, then such interest shall be repaid to Borrower.
6. ASSIGNMENT: Borrower will not be entitled to assign any of its rights,
remedies or obligations described in this Note without the prior written
consent of Lender which may be withheld by Lender in its sole discretion.
Lender will be entitled to assign some or all of its rights and remedies
described in this Note without notice to or the prior consent of Borrower
in any manner.
7. NOTICE: Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.
8. APPLICABLE LAW: This Note shall be governed by the laws of the state
indicated in Lender's address. Borrower consents to the jurisdiction and
venue of any court located in the state indicated in Lender's address in
the event of any legal proceeding pertaining to the negotiation,
execution, performance or enforcement of any term or condition contained
in this Note or any related loan document and agrees not to commence or
seek to remove such legal proceeding in or to a different court.
9. COLLECTION COSTS: If Lender hires an attorney to assist in collecting
any amount due or enforcing any right or remedy under this Note, Borrower
agrees to pay Lender's attorney's fees, to the extent permitted by
applicable law, and collection costs.
10. RETURNED CHECK: If a check for payment is returned to Lender for any
reason, Lender will charge an additional fee of $15.00.
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11. MISCELLANEOUS: This Note is being executed for commercial/agricultural
purposes. Borrower and Lender agree that time is of the essence. Borrower
waives presentment, demand for payment, notice of dishonor and protest.
If Lender obtains a judgment for any amount due under this Note, interest
will accrue on the judgment at the judgment rate of interest permitted by
law. All references to Borrower in this Note shall include all of the
parties signing this Note. If there is more than one Borrower, their
obligations will be joint and several. This Note and any related
documents represent the complete and integrated understanding between
Borrower and Lender pertaining to the terms and conditions of those
documents.
12. JURY TRIAL WAIVER: BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY
IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON THIS NOTE OR THE
COLLATERAL SECURING THIS NOTE.
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BORROWER ACKNOWLEDGES THAT BORROWER HAS READ, UNDERSTANDS, AND AGREES TO THE
TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE GENERAL TERMS AND CONDITIONS
SET FORTH ABOVE. BORROWER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS NOTE.
Note Date: December 31, 1996
BORROWER:
NORTECH SYSTEMS INCORPORATED
BY: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Its: Vice President
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