EXHIBIT 10.2
PROMISSORY NOTE
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$2,250,000.00 October 28, 2005
Dallas, Texas
FOR VALUE RECEIVED, the undersigned BEST CIRCUIT BOARDS, INC., a Texas
corporation (the "Borrower"), hereby promises to pay to the order of COMPASS
BANK ("Bank") at the Bank's office at 0000 Xxxxxxx Xxxx, Xxxxxx, Xxxxx
00000-0000, or such other place as holder of this Note may direct, in lawful
money of the United States of America, the principal amount of Two Million
Two Hundred Fifty Thousand and No/100 DOLLARS ($2,250,000.00), or so much
thereof as may be advanced hereunder, with interest at the rate and
calculated in the manner described herein.
1. Definitions. As used in this Note, the following terms shall have
the following meanings:
(a) "Business Day" shall mean a day of the year on which national banks
in New York, New York are open for business.
(b) "Compass Bank Index Rate" shall mean the prime rate as published in
"Money Rates" table of The Wall Street Journal on the applicable day. If
multiple prime rates are quoted in the table, then the highest prime rate
will be the Compass Bank Index Rate. In the event the prime rate is no
longer published in the "Money Rates" table, then the Bank will choose a
substitute rate as the Compass Bank Index Rate which is based upon
comparable information.
(c) "Default Rate" shall mean the rate per annum which is five percent
(5%) above the Compass Bank Index Rate.
(d) "Guarantor" shall mean Xxxx Xxxxxx.
(e) "LIBOR Index Rate" shall mean the London Interbank Offered Rate for
a period of thirty (30) days, as quoted on the Telerate Information System,
page 3750, on the applicable determination date (or in the event no such
quotation is available on such date on the day most immediately preceding
the determination date on which such a quotation was available). In the
event the Telerate Information Service ceases to be available to the Bank or
ceases to provide information sufficient to determine the London interbank
offered rate for a period of thirty (30) days, the "LIBOR Index Rate" shall
mean the London Interbank Offered Rate for a period of thirty (30) days, as
published in the "Money Rates" table of The Wall Street Journal on the
applicable determination date (or in the event no such quotation is
available on such date, as quoted on the day most immediately preceding the
determination date on which such a quotation was available). In the event
the London Interbank Offered Rate for a period of thirty (30) days, is no
longer published in the "Money Rates" table, then the Bank will choose a
substitute rate as the LIBOR Index Rate based on comparable information,
which may include quotations from such services as Reuters Monitor Money
Rates Service or Xxxxxx-Xxxxx News Service.
(f) "LIBOR Based Rate" shall mean a rate of interest based on the LIBOR
Index Rate.
(g) "Loan" shall mean the $2,250,000.00 loan made to Borrower by the
Bank and evidenced hereby.
(h) "Maturity Date" shall mean ____________ __, 2010.
(i) "Maximum Allowable Rate" shall mean, on any day, the maximum
nonusurious rate of interest permitted for that day by whichever of
applicable federal or Texas law permits the higher interest rate, stated as
a rate per annum.
(j) "Principal Amount" shall mean that portion of the Loan evidenced
hereby as is from time to time outstanding.
(k) "Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as from time to time amended or supplemented.
(l) "Regulation" shall mean with respect to the charging and collecting
of interest at a LIBOR Based Rate, any United States federal, state or
foreign laws, treaties, rules or regulations, whether now in effect or
hereinafter enacted or promulgated (including Regulation D), or any
interpretations, directives or requests applying to a class of depository
institutions including the Bank under any United States federal, state or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation
or administration thereof.
2. Payment; Interest. From and after the date thereof, this Note shall
bear interest and be payable as follows:
(a) Interest shall be payable monthly on the first (1 ) day of each
month, with the st first such interest payment to be due and payable on
____________ 1, 2005 and with subsequent interest payments to be due and
payable on the first (1 ) day of each succeeding month until this st Note
has been paid in full. Interest shall be computed daily on the principal
amount owing hereunder from time to time in the manner and at the rate set
forth below.
(b) Installments of principal in the amount of $37,500.00 each shall be
due and payable on ____________ 1, 2005 and on the first (1 ) day of each
month thereafter, through and st including ____________ 1, 2010.
(c) The entire unpaid principal balance of this Note, together with all
interest and other sums due under the Loan Documents, shall be due and
payable on the Maturity Date.
(d) In the event the first day of any month during the term of this
Note is not a Business Day, then notwithstanding anything to the contrary
contained elsewhere herein any payment of principal or interest on this Note
which would otherwise be payable on such day shall be due and payable on the
next succeeding Business Day.
(e) From and after the date hereof this Note shall bear interest on the
outstanding unpaid principal balance at a varying rate per annum equal to
the lesser of (i) the Applicable Rate and (ii) the Maximum Allowable Rate,
each such change in the rate of interest charged hereunder to be effective,
without notice to Borrower, on the effective date of each change in the
Applicable Rate or the Maximum Allowable Rate, as the case may be. Interest
on this Note shall be calculated at a daily rate equal to 1/360th of the
annual percentage rate which this Note bears; provided, however, that if the
Maximum Allowable Rate would be exceeded by virtue of the calculation of
interest based upon a 360-day year, then to the extent necessary to avoid
exceeding the Maximum Allowable Rate, interest shall be computed on the
basis of the actual number of days elapsed in the applicable calendar year
in which it accrued; and provided further that if at any time the Applicable
Rate exceeds the Maximum Allowable Rate, resulting in the charging of
interest under this Note to be limited to the Maximum Allowable Rate, then
any subsequent reduction in the Applicable Rate shall not reduce the rate of
interest below the Maximum Allowable Rate until the total amount of interest
accrued on the indebtedness evidenced by this Note equals the amount of
interest which would have accrued if the Applicable Rate had at all times
been in effect. The "Applicable Rate" shall be a per annum rate equal to the
LIBOR Index Rate in effect from day to day plus two and fifteen one
hundredth percent (2.15%).
(f) After default or maturity, past due principal and past due interest
to the extent permitted by law, shall bear interest at the lesser of the
Maximum Allowable Rate or the Default Rate.
(g) Notwithstanding any other provisions to the contrary in this Note,
if while this Note bears interest at a LIBOR Based Rate, the Bank determines
that any applicable law, rule or Regulation shall make it unlawful or
impossible for the Bank to maintain loans bearing interest at the applicable
LIBOR Based Rate, then the Principal Amount shall bear interest at a varying
rate per annum equal to the Compass Bank Index Rate commencing either (i) on
the last day of the then current calendar month if the Bank may lawfully
continue until such day to maintain loans bearing interest at the applicable
LIBOR Based Rate or (ii) immediately, if the Bank may not lawfully continue
to maintain loans bearing interest at the applicable LIBOR Based Rate to the
end of such calendar month.
(h) In no event shall the rate of interest calculated and charged
hereunder exceed the Maximum Allowable Rate. All agreements between Borrower
and the Bank, or any subsequent holder of this Note, whether now existing or
hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever, whether by reason of acceleration of
the maturity of this Note or otherwise, shall the aggregate of all amounts
paid or agreed to be paid to the holder of this Note for the use,
forbearance or detention of the funds advanced pursuant to this Note or for
the performance or payment of any covenant or obligation contained herein or
in any other document evidencing, securing or pertaining to this Note or of
any other debt evidenced hereby exceed the Maximum Allowable Rate. If from
any circumstances whatsoever, fulfillment of any provision hereof or of any
such other document, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by applicable
law, then, ipso facto, the obligation to be fulfilled shall be reduced to
the limit of such validity, and if from any circumstance or reason
whatsoever, the interest paid or received on this Note during its full term
produces a rate which exceeds the Maximum Allowable Rate, the Bank or any
subsequent holder of this Note shall refund to the payor or, at the Bank's
or such holder's option, credit against the unpaid principal of this Note,
if any, such portion of said interest as shall be necessary to cause the
interest paid on this Note to produce a rate equal to the Maximum Allowable
Rate. All sums paid or agreed to be paid to any holder of this Note for the
use, forbearance or detention of the indebtedness evidenced by this Note
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of this Note so
that the interest is uniform throughout the full term of this Note. The
terms and provisions of this paragraph shall control and supersede every
other provision of all agreements between Borrower and any holder of this
Note.
3. Prepayments. This Note may be prepaid in whole or in part, at any
time, without premium or penalty.
4. Security. The indebtedness evidenced hereby is secured by a Credit
and Security Agreement of even date herewith (the "Loan Agreement") between
Borrower, Guarantor and the Bank. This Note, the Loan Agreement and any
other document now or hereafter evidencing, securing, guaranteeing or
executed in connection with the Loan are, as the same have been or may be
amended, restated, modified or supplemented from time to time, herein
sometimes called individually a "Loan Document" and together the "Loan
Documents." Any notice required or which any party desires to give under
this Note shall be given and effective as provided in the Loan Agreement.
This Note is included in the indebtedness referred to in the Loan Documents
and is entitled to the benefits of the Loan Documents, but neither this
reference to the Loan Documents nor any provisions thereof shall affect or
impair the absolute and unconditional obligation of Borrower to pay the
principal of and interest on this Note when due.
5. Purpose. Borrower represents, warrants and covenants to and with
the Bank and any other holder of this Note that the loan evidenced by this
Note and all advances hereunder and under the other Loan Documents are and
shall be for business, commercial, investment or other similar purposes and
not primarily for personal, family, household or agricultural use, as such
terms are used in the Texas Finance Code.
6. Default. As used in this Note, "Event of Default" shall mean the
happening of any of the events defined as constituting an Event of Default
in Loan Agreement. Upon the occurrence of an Event of Default, or at any
time thereafter, the holder of this Note may, with or without notice to
Borrower, declare this Note to be forthwith due and payable, whereupon this
Note and the indebtedness evidenced hereby shall forthwith be due and
payable, both as to principal and interest, without presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in any of the Loan Documents or in any
other instrument executed in connection with or securing this Note to the
contrary notwithstanding.
7. Cross Default. Borrower and the Bank have entered into, or
subsequent to the date hereof Borrower and the Bank may enter into, an ISDA
Master Agreement (the "Master Agreement") under the terms of which Borrower
and the Bank have entered into or may enter into interest rate swap, cap,
floor, collar or option transactions. Borrower hereby agrees that the
occurrence of an Event of Default under the Master Agreement shall
constitute an Event of Default under this Note, and the Bank shall
thereafter have all rights and remedies available to it following the
occurrence of an Event of Default under both this Note and the Master
Agreement.
8. Late Charge. If any installment of principal and/or interest payable
under this Note is not paid on or before ten (10) days from the date such
installment is due, Borrower agrees to pay a late charge equal to five
percent (5%) of the amount of the unpaid installment to compensate the Bank
for the additional expense involved in handling delinquent payments;
however, the obligation to pay such late charge is subject to the limitation
contained in the subparagraph (h) of Section 2 of this Note.
9. Waivers. Except as otherwise expressly provided herein or in the
other Loan Documents, Borrower and any endorser or guarantor of this Note
hereby waive demand, presentment for payment, notice of dishonor, protest,
notice of intent to accelerate, notice of acceleration, notice of protest
and diligence in collection or bringing suit and agree that the holder
hereof may accept partial payment, or release or exchange security or
collateral, without discharging or releasing any unreleased collateral or
the obligations evidenced hereby. No failure of any holder of this Note to
accelerate the indebtedness evidenced hereby or to exercise any other right
hereunder shall be construed as a novation or modification of this Note or a
waiver of the holder's right to thereafter insist upon strict compliance
with the terms of this Note without prior notice of such intention being
given to Borrower.
10. Attorneys' Fees. Borrower and each endorser or guarantor of this
Note agree to pay reasonable attorneys' fees and costs incurred by the
holder hereof in collecting or attempting to collect this Note, whether by
suit or otherwise.
11. Applicable Law; Venue; Parties. THIS NOTE IS BEING DELIVERED TO,
AND ACCEPTED BY, THE BANK IN THE STATE OF TEXAS AND THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT. Borrower and
the Bank expressly agree that Chapter 364 of the Texas Finance Code shall
not apply to this Note or to the loan evidenced by this Note or any advance
thereunder. As used herein, the terms "Borrower", "Bank" and "holder" shall
be deemed to include their respective successors, legal representatives,
heirs and assigns, whether by voluntary action of the parties or by
operation of law.
IN WITNESS WHEREOF, Xxxxxxxx has executed and delivered this Note in Dallas
Texas, as of the day and year first above written.
BORROWER:
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BEST CIRCUIT BOARDS, INC.,
a Texas corporation
By:______________________________________
Xxxx Xxxxxx, President
