EXHIBIT 10.32
PROMISORY NOTE
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$3,000,000.00 November 19, 1998
Bloomington, Minnesota
FOR VALUE RECEIVED, the undersigned, FIELDWORKS, INCORPORATED ("Borrower")
promises to pay to the order of SPECTRUM COMMERCIAL SERVICES, a division of Lyon
Financial Services, Inc., (the "Lender") at its office in Bloomington,
Minnesota, or at such other place as any present or future holder of this Note
may designate from time to time, the principal sum of (i) Three Million and
00/100 Dollars ($3,000,000.00), or (ii) the aggregate unpaid principal amount of
all advances and/or extensions of credit made by the Lender to the undersigned
pursuant to this Note as shown in the records of any present or future holder of
this Note, whichever is less, plus interest thereon from the date of each
advance in whole or in part included in such amount until this Note is fully
paid. Interest shall be computed on the basis of the actual number of days
elapsed and a 360-day year, at an annual rate equal to Three percent (3.0%) per
annum in excess of the Prime Rate of Norwest Bank Minnesota, NA (the "Initial
Rate"), and that shall change when and as said Prime Rate shall change;
provided, however, that (i) in no event shall the interest rate in effect
hereunder at any time be less than 9% per annum; and (ii) interest payable
hereunder with respect to each calendar month shall not be less than $5,950.00
regardless of the amount of loans, advances or other credit extensions that
actually may have been outstanding during the month. Interest is due and payable
on the first day of each calendar month and at maturity (the Initial Rate, the
Adjusted Rate as well as other rates of interest referred to herein shall be
referred to collectively herein as the "Rate of Interest"). The term "Prime
Rate" means the rate established by Norwest Bank in its sole discretion from
time to time as its Prime or Base Rate, and the undersigned acknowledges that
Norwest Bank and/or Lender may lend to its customers at rates that are at, above
or below the Prime Rate. Notwithstanding the foregoing, while an Event of
Default occurs and continues to exist, this Note shall bear interest until fully
paid at five percent (5%) per annum in excess of the rate otherwise then in
effect, which rate shall continue to vary based on further changes in the Prime
Rate; provided, however, that after an Event of Default, (i) in no event shall
the interest rate in effect hereunder at any time be less than 14% per annum;
and (ii) interest payable hereunder with respect to each calendar month shall
not be less than $8,660.00 regardless of the amount of loans, advances or other
credit extensions that actually may have been outstanding during the month. The
undersigned also shall pay the holder of this Note a late fee equal to 10% of
any payment under this Note that is more than 10 days past due.
In the event the undersigned earns "Net Profit" (as defined in the Credit
Agreement) for the 12 months ending October 31, 1999 of at least One Million
Dollars ($1,000,000) and evidences such profit by delivering to Lender a
financial statement prepared according to GAAP that
reflects the required Net Profit, and provided no Event of Default exists or has
occurred, then upon the written request of the undersigned, the Initial Rate
shall be reduced to Two and One Half percent (2 1/2%) in excess of the Prime
Rate (the "Adjusted Rate") commencing with the next scheduled Monthly Payment
Date (as defined in the Credit Agreement) following Xxxxxx's receipt of
Xxxxxxxx's written request.
All interest, principal, and any other amounts owing hereunder are due on
November 18, 2000 or earlier UPON DEMAND by Lender or any holder hereof, and
Xxxxxx specifically reserves the absolute right to demand payment of all such
amounts at any time, with or without advance notice, for any reason or no reason
whatsoever. Xxxxxx's right to make such demand is not exclusive and Lender may
coincidentally or separately from such demand make further demand for payment
pursuant to the terms hereof (including but not limited to upon the occurrence
of an Event of Default), and further, amounts may become due hereunder without a
demand by Xxxxxx.
All or any part of the unpaid balance of this Note may be prepaid upon sixty
days prior written notice, provided, however, that if this Note is fully
pre-paid prior to November 1, 2000, then there shall be a prepayment charge as
provided in the Credit Agreement.. At the option of the then holder of this
Note, any payment under this Note may be applied first to the payment of other
charges, fees and expenses under this Note and any other agreement or writing in
connection with this Note, second to the payment of interest accrued through the
date of payment, and third to the payment of principal. Amounts may be advanced
and readvanced under this Note at the Lender's sole and absolute discretion,
provided the principal balance outstanding shall not exceed the amount first
above written. Neither the Lender nor any other person has any obligation to
make any advance or readvance under this Note.
The occurrence of any of the following events shall constitute an Event of
Default under this Note: (i) any default in the payment of this Note; or (ii)
any other default under the terms of any now existing or hereafter arising debt,
obligation or liability of any maker, endorser, guarantor or surety of this Note
or any other person providing security for this Note or for any guaranty of this
Note, including, but not limited to, that certain General Credit and Security
Agreement dated November 2, 1998 ("Credit Agreement") and Validity Guarantees of
Xxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxxxxx dated November 2, 1998; or (iii) the
insolvency (other than the insolvency of the undersigned), death dissolution,
liquidation, merger or consolidation of any such maker, endorser, guarantor,
surety or other person; or (iv) any appointment of a receiver, trustee or
similar officer of any property of any such maker, endorser, guarantor, surety
or other person; or (v) any assignment for the benefit of creditors of any such
maker, endorser, guarantor, surety or other person; or (vi) any commencement of
any proceeding under any bankruptcy, insolvency, dissolution, liquidation or
similar law by or against any such maker, endorser, guarantor, surety or other
person, provided however, that if such a proceeding is commenced against the
maker hereof or any Guarantor on an involuntary basis, then only if such action
is not dismissed within 60 days of first being filed; or (vii) the sale, lease
or other disposition (whether in one transaction
or in a series of transactions) to one or more persons of all or a substantial
part of the assets of any such maker, endorser, guarantor, surety or other
person; or (viii) any such maker, endorser, guarantor, surety or other person
dies or takes any action to revoke or terminate any agreement, liability or
security in favor of the Lender; or (ix) the entry of any judgment or other
order for the payment of money in the amount of $10,000.00 or more against any
such maker, endorser, guarantor, surety or other person which judgment or order
is not discharged or stayed in a manner acceptable to the then holder of this
Note within 10 days after such entry; or (x) the issuance or levy of any writ,
warrant, attachment, garnishment, execution or other process against any
property of any such maker, endorser, guarantor, surety or other person; or (xi)
the issuance or attachment of any tax lien or tax levy against any property of
any such maker, endorser, guarantor, surety or other person which is other than
for taxes or assessments not yet due and payable; or (xii) any statement,
representation or warranty made by any such maker, endorser, guarantor, surety
or other person (or any representative of any such maker, endorser, guarantor,
surety or other person) to any present or future holder of this Note at any time
shall be false, incorrect or misleading in any material respect when made; or
(xiii) there is a material adverse change in the condition (financial or
otherwise), business or property of any such maker, endorser, guarantor, surety
or other person. Upon the occurrence of any Event of Default described in
subparagraphs (iii), (iv), (v) or (vi) above, all amounts outstanding under this
Note (including unpaid principal, interest and other charges due or accruing
hereunder) shall be and become immediately due and payable without any
declaration, notice, presentment, protest, demand or dishonor of any kind (all
of which are hereby waived by Borrower) and Borrower's ability to obtain any
additional credit extensions or advances under this Note shall be immediately
and automatically terminated. Upon the occurrence of an Event of Default and at
any time thereafter while an Event of Default is continuing, the then holder of
this Note may, at its option, declare this Note to be immediately due and
payable and thereupon this Note shall become due and payable for the entire
unpaid principal balance of this Note plus accrued interest and other charges on
this Note without any presentment, demand, protest or other notice of any kind.
The undersigned: (i) waives demand, presentment, protest, notice of protest,
notice of dishonor and notice of nonpayment of this Note; (ii) agrees to
promptly provide all present and future holders of this Note from time to time
with financial statements of the undersigned and such other information
respecting the financial condition, business and property of the undersigned as
any such holder of this Note may reasonably request, in form and substance
acceptable to such holder of this Note; (iii) agrees that when or at any time
after this Note becomes due the then holder of this note may offset or charge
the full amount owing on this note against any account then maintained by the
undersigned with such holder of this Note without notice; (iv) agrees to pay on
demand all fees, costs and expenses of all present and future holders of this
Note in connection with this Note and any security and guaranties for this Note,
including but not limited to audit fees and expenses and reasonable attorneys'
fees and legal expenses, plus interest on such amounts at the rate set forth in
this Note; and (v) consents to the personal jurisdiction of the state and
federal courts located in the State of Minnesota in connection with any
controversy related in any way to this Note or any security of guaranty for this
Note, waives any argument that venue in such forums is not convenient, and
agrees that any litigation initiated by the undersigned against the Lender or
any other present or future holder of this Note relating in any
way to this Note or any security or guaranty for this Note shall be venued (at
the sole option of Lender or the holder hereof) in either the District Court of
Dakota or Hennepin County, Minnesota, or the United States District Court,
District of Minnesota. Interest on any amount under this Note shall continue to
accrue, at the option of any present or future holder of this Note, until such
holder receives final payment of such amount in collected funds in form and
substance acceptable to such holder. The maker agrees that, if it brings any
action or proceeding arising out of or relating to this Agreement, it shall
bring such action or proceeding in the District Court of Hennepin County,
Minnesota.
In the event a court of competent jurisdiction determines that any of the
figures called the Rate of Interest violates any usury laws or any other law,
then, such Rate of Interest or other provision shall be accordingly and
retroactively adjusted or modified to comply with the highest rate allowed under
applicable law. Further, if any provision or application of any provision of
this Note other than the Rate of Interest (including but not limited to any
provision relating to the calculation of interest) is held unlawful or
unenforceable in any respect (including but not limited to any usury or similar
law), such illegality or unenforceability shall not affect other provisions or
applications which can be given effect, and this Note shall be construed as if
the unlawful or unenforceable provision or application had never been contained
herein or prescribed hereby. The undersigned waives notice of acceptance hereof.
No waiver of any right or remedy under this Note shall be valid unless in
writing executed by the holder of this Note, and any such waiver shall be
effective only in the specific instance and for the specific purpose given. All
rights and remedies of all present and future holders of this Note shall be
cumulative and may be exercised singly, concurrently or successively. The
undersigned, if more than one, shall be jointly and severally liable under this
Note, and the term "undersigned," wherever used in this Note, shall mean the
undersigned or any one or more of them. This Note shall bind the undersigned and
the successors and assigns of the undersigned. This Note shall be governed by
and construed in accordance with the laws of the State of Minnesota.
THE UNDERSIGNED REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE UNDERSIGNED
HAS READ ALL OF THIS NOTE AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS NOTE.
THE UNDERSIGNED ALSO AGREES THAT COMPLIANCE BY ANY PRESENT OR FUTURE HOLDER OF
THIS NOTE WITH THE EXPRESS PROVISIONS OF THIS NOTE SHALL CONSTITUTE GOOD FAITH
AND SHALL BE CONSIDERED REASONABLE FOR ALL PURPOSES.
FIELDWORKS, INCORPORATED
By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
CEO
