PROMISSORY NOTE (Term Loan-Prime)
Exhibit
10.2
(Term
Loan-Prime)
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$1,735,716.61
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Chicago,
Illinois
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Maturity
Date: September 25, 2012
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Dated:
September 25, 2008
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FOR
VALUE RECEIVED on
or
before the Maturity Date stated above (or such earlier Maturity Date as may
apply in accordance with the provisions of the Loan Agreement referred to
below), the undersigned (hereinafter referred to as “Borrower”), promises to pay
to the order of The PrivateBank and Trust Company, an Illinois banking
corporation (hereinafter referred to as “Lender”), at its offices located at 00
X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as Lender
may
designate in writing, the principal sum of One Million Seven Hundred Thirty
Five
Thousand Seven Hundred Sixteen and 61/100 Dollars ($1,735,716.61), plus interest
as hereinafter provided, in lawful money of the United States. This Note is
entered into pursuant to the terms of that certain Loan Agreement dated
September 25, 2008 by and between Xxxxxxxx and Xxxxxx, as may be amended,
restated or replaced from time to time (the “Loan Agreement”). Capitalized terms
in this Note and not otherwise defined herein shall have the meanings given
to
them in the Loan Agreement.
The
unpaid principal balance outstanding from time to time under this Note shall
bear interest at the Prime-based Rate. Interest shall be calculated on the
basis
of a 360 day year for the actual number of days elapsed. The Prime-based Rate
shall be adjusted on the effective date of each change in the Prime Rate. Lender
shall not be required to notify Borrower of any adjustment in the Prime-based
Rate.
This
Note
shall be repaid by consecutive monthly installments of principal, each in the
amount of Thirty Six Thousand One Hundred Sixty and 76/100 Dollars ($36,160.76)
plus interest, commencing on the third day of November, 2008 and continuing
on
the first Business Day of each month thereafter, calculated using an original
four (4) year amortization from the date of this Note. The unpaid principal
balance and all accrued interest thereon shall be due and payable in full on
the
Maturity Date (or earlier upon acceleration). Amounts repaid may not be
readvanced.
If
any
payment of principal or interest hereunder is not paid within ten (10) Business
Days from the date same is due, then, at the option of Lender, in addition
to
all other sums due hereunder, the Borrower shall pay a late charge in an amount
equal to the greater of: (a) $250 or (b) one cent (1¢) per dollar ($1.00) for
each such payment that is delinquent ten (10) Business Days or
more.
The
sums
advanced hereunder shall be charged to a loan account in Xxxxxxxx’s name on
Xxxxxx’s books (the “Loan Account”), and Xxxxxx shall credit to such account the
amount of each repayment hereunder. Lender shall render Borrower, from time
to
time, or upon Xxxxxxxx’s request, a statement of account setting forth the
Borrower’s loan balance in said Loan Account which shall be presumed to be
correct and accepted by and binding upon Xxxxxxxx, unless Xxxxxx receives a
written statement of exceptions within ten (10) Business Days after such
statement has been rendered to Borrower. Such statement of account shall be
prima facie evidence of the loan and amounts owing to Lender by Borrower
hereunder.
Any
payment made by mail will be deemed tendered and received only upon actual
receipt (time being of the essence), at the address of Lender designated for
such payment whether or not Lender has authorized payment by mail or any other
manner. Borrower hereby expressly assumes all risk of loss or liability
resulting from non-delivery or delay in delivery of any payment transmitted
by
mail or in any other manner.
No
delay
or failure of Lender in exercising any right, remedy, power or privilege
hereunder shall affect such right, remedy, power or privilege, nor shall any
single or partial exercise thereof preclude the exercise of any other right,
remedy, power or privilege. No delay or failure of Lender at any time to demand
strict adherence to the terms of this Note shall be deemed to constitute a
course of conduct inconsistent with the Lender’s right at any time, before or
after any Event of Default, to demand strict adherence to the terms of this
Note.
At
any
time and from time to time, Xxxxxxxx may prepay the principal balance of this
Note in whole or in part before the original due date of that principal. There
shall be no prepayment penalty or premium in the event of such prepayment,
except as otherwise provided in any interest rate protection or swap agreement
now or hereafter entered into by Borrower with Lender or any affiliate of
Lender.
Nothing
herein contained, nor any transaction relating thereto, or hereto, shall be
construed or so operate as to require the Borrower to pay, or be charged,
interest at a greater rate than the maximum allowed by the applicable law
relating to this Note. Should any interest or other charges, charged, paid
or
payable by the Borrower in connection with this Note, or any other document
delivered in connection herewith, result in the charging, compensation, payment
or earning of interest in
excess
of the
maximum allowed by the applicable law as aforesaid, then any and all such excess
shall be and the same is hereby waived by the holder, and any and all such
excess paid shall be automatically credited against and in reduction of the
principal due under this Note. If Lender shall reasonably determine that the
Prime-based Rate (together with all other charges or payments related hereto
that may be deemed interest) stipulated under this Note is or may be usurious
or
otherwise limited by law, the unpaid balance of this Note, with accrued interest
at the highest rate then permitted to be charged by stipulation in writing
between Lender and Borrower, at the option of Lender, shall immediately become
due and payable.
If
an
Event of Default, as set forth in the Loan Agreement, occurs the entire unpaid
principal balance and all accrued interest shall at the sole option of Lender
be
immediately due and payable, together with (to the extent permitted under
applicable law) the costs, attorneys’ and outside consultants’ fees, which, in
either case, are reasonably incurred by Lender in collecting or enforcing
payment, and the outstanding principal amount hereof shall bear interest at
the
Default Rate.
Borrower
hereby grants to Lender a security interest in Xxxxxx’s own indebtedness or
liability to Borrower, if any, however evidenced, including a security interest
in all of Borrower’s bank deposits, instruments, negotiable documents and
chattel paper which at any time are in the possession or control of Lender,
as
further security for repayment of the Obligations; and the Borrower hereby
grants to Lender all rights and privileges afforded a secured party under the
Michigan Uniform Commercial Code.
All
payments other than scheduled payments paid hereunder shall, at the option
of
Xxxxxx, first be applied against any and all fees, costs and expenses (including
expenses of collection), then against accrued interest, and the balance against
principal. Acceptance by Lender of any payment in an amount less than the amount
then due shall be deemed an acceptance on account only, and the failure to
pay
the entire amount then due shall be and continue to be an Event of
Default.
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Borrower
hereby waives presentment for payment, demand, notice of non-payment (except
such notice, if any, as required under the Loan Agreement) notice of protest
and
protest of this Note, diligence in collection or bringing suit.
This
Note
is secured by, and executed pursuant to, the Loan Agreement and the other Loan
Documents therein described. Reference is hereby made to said Loan Agreement
and
Loan Documents for additional terms relating to the transaction giving rise
to
this instrument, the security given for this instrument and additional terms
and
conditions under which this instrument matures, accelerates or may be prepaid.
Xxxxxxxx’s obligations hereunder are cross-collateralized and cross-defaulted
with all other indebtedness owing to Lender by Xxxxxxxx.
DEFINITIONS
As
used
in this Note, the following terms shall have the given meaning:
“Applicable
Margin” shall mean one percent (1%); provided, however, upon receipt by Lender
of Borrower’s audited financial statements for the 2009 fiscal year, the
Applicable Margin shall decrease to zero percent (0%) if and only if Borrower’s
Adjusted EBITDA (as defined in the Loan Agreement) is equal to or greater than
Five Million Dollars ($5,000,000).
“Default
Rate” shall mean an annual rate of interest equal to the lesser of (i) three
percent (3.0%) per annum in excess of the Prime-based Rate or (ii) the highest
rate of interest permitted by applicable law to be charged for unpaid monetary
obligations.
“Loan
Agreement” shall mean that certain Loan Agreement dated September 25, 2008 by
and between Xxxxxxxx and Lender, as it may be amended, restated or replaced
from
time to time.
“Prime-based
Rate” shall mean a per annum rate of interest equal to the Prime Rate plus the
Applicable Margin.
“Prime
Rate” shall mean the fluctuating rate of interest publicly announced by the
Lender at its principal place of business from time to time as being its prime
rate of interest thereafter in effect, with each change in the Prime Rate
automatically and without notice changing the rate then in effect. The Prime
Rate is not necessarily the lowest rate of interest which may be available
from
the Lender on fluctuating rate loans.
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Signature
Page to Promissory Note (Term Loan-Prime)
dated
September 25, 2008
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BORROWER:
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ADVANCED
PHOTONIX, INC.
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Address:
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2925
Boardwalk
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By:
/s/ Xxxxxxx X. Xxxxx
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Ann
Arbor, Michigan 48104
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Its:
CEO and President
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Its:
Chief Financial Officer
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