Exhibit 10.4
MORTGAGE NOTE
$630,000.00 February 13, 2004
Term: Five (5) Years
FOR VALUE RECEIVED, Micronetics, Inc., a Delaware
corporation with an address of 00 Xxxxxxxxx Xxxxx, Xxxxxx, Xxx
Xxxxxxxxx 00000 (the "Maker"), promises to pay to Banknorth,
N.A., a national banking association (the "Lender"), or to its
order, at its principal New Hampshire office at 300 Franklin
Street, Manchester, New Hampshire and a mailing address of P.O.
Box 600, Manchester, New Hampshire 03105-0600, the principal sum
of Six Hundred Thirty Thousand and No/100ths Dollars
($630,000.00), together with interest in arrears on the unpaid
principal balance from time to time outstanding and on all
outstanding interest not paid when due, from the date hereof,
until the entire principal amount due hereunder is paid in full,
at the Fixed Rate (as hereinafter defined). Interest shall be
payable monthly, commencing one (1) month from the date hereof,
and on the same day of each month thereafter (or on the last day
of the month if such day does not exist in a particular month),
or the next business day thereafter if such day is not a business
day, and continuing monthly thereafter until this Note is paid in
full. In each case, interest shall be calculated on the basis of
the actual number of days elapsed over a year of 360 days.
Commencing on the date hereof, interest shall be charged at
the Fixed Rate.
As used herein, the following terms shall have the meanings
set forth below:
"Fixed Rate" shall mean an interest rate per annum of
five and three quarters percent (5.75%).
"Maturity Date" shall mean that day which is five (5)
years from the date hereof.
So long as no Event of Default (as hereinafter defined)
shall occur, in which event the Lender may elect to accelerate
the maturity hereof, the principal balance of this Note together
with any unpaid interest thereon, shall be due and payable as
follows:
a. Commencing one (1) month from the date hereof,
regular monthly payments in the amount of $12,106.56.
b. Any unpaid principal or interest remaining unpaid
on the Maturity Date shall be due and payable at that time.
In the event this Note is prepaid in whole or in part from
proceeds of a refinance or borrowing from any person or entity
other than the Lender, the Maker shall pay the Lender the
following Prepayment Penalty.
PREPAYMENT PENALTY: THE MAKER AGREES TO PAY THE LENDER A
PREPAYMENT PENALTY OF; (i) THREE (3) PERCENT OF THE OUTSTANDING
LOAN BALANCE IF THE LOAN IS PAID OFF IN THE FIRST YEAR, (ii) A
PREPAYMENT PENALTY OF TWO (2) PERCENT OF THE OUTSTANDING LOAN
BALANCE IF THE LOAN IS PAID OFF IN THE SECOND YEAR AND, (iii) A
PREPAYMENT PENALTY OF ONE (1) PERCENT OF THE OUTSTANDING LOAN
BALANCE IF THE LOAN IS PAID OFF IN THE THIRD, FOURTH OR FIFTH
YEAR.
This Note is secured by, inter alia, (i) a Mortgage Deed And
Security Agreement of the Maker of even date herewith (the
"Mortgage") covering certain real estate located in Hudson, New
Hampshire (the "Mortgaged Premises"), and (ii) a Collateral
Assignment of Leases and Rents, each of even date herewith, and
together with any other instruments securing this Note being
hereinafter collectively referred to as the "Security
Instruments". This Note is entitled to all of the benefits of
the Security Instruments and specific reference is hereby made to
such instruments for all purposes.
Upon the occurrence of any one of the following events (each
of which events shall be an Event of Default hereunder):
(i) the failure of Maker to make
any payment of principal or interest hereunder when due
and the continuance of such failure for five (5) days
after written notice thereof, or
(ii) an Event of Default as
described and defined in any of the Security
Instruments or any other instrument evidencing any
indebtedness of the Maker to the Lender in conjunction
with the loan evidenced hereby, or otherwise, and the
expiration of any period provided in such instrument to
cure such default, or
(iii) the failure to keep the
Mortgaged Premises in the sole ownership of the Maker,
or
(iv) the failure of the Maker to
maintain any insurance coverage required under the
Security Instruments, or
(v) the failure of the Maker to maintain a debt
service coverage ratio, as reasonably calculated by the
Lender, of at least 1.25:1, which shall be tested
annually (debt service coverage ratio shall be defined
as net operating income + depreciation+ interest
expense divided by current portion of long term debt
plus interest), or
(vi) total debt to tangible net
worth ratio of the Maker as reasonably determined by
the Lender (including the debt evidenced by this Note)
shall exceed 1.25x as measured at each Fiscal Year End
(the ratio shall be computed as total liabilities
divided by asset - intangible items - liabilities), or
(vii) the failure of the Maker to
permit its Net Worth as reasonably determined by the
Lender, to be, at any time, less than $2,000,000.00, or
(viii) the failure of the Maker
maintain its primary bank accounts with the Lender, or
(viii) the failure of the Maker to
comply with the terms of any commitment letter from
Lender to Maker dated January 21, 2004,
then the holder hereof may declare the entire unpaid principal
balance and interest immediately due and payable without notice,
demand or presentment and may exercise any of its rights under
the Security Instruments. In addition, in the event of an Event
of Default under this Note, this Note shall bear interest from
and including the date of such Event of Default, compounded daily
and payable on demand, at a rate per annum equal to five percent
(5%) above Fixed Rate. In the event that the Lender or any
subsequent holder of this Note shall exercise or endeavor to
exercise any of its remedies hereunder or under the Security
Instruments, the Maker shall pay on demand all reasonable costs
and expenses incurred in connection therewith, including, without
limitation, reasonable attorney's fees. Irrespective of the
exercise or nonexercise of any of the aforesaid rights, if any
monthly payment of principal or interest hereunder is not paid in
full within fifteen (15) days after the same is due, the Maker
shall pay to the holder a processing fee on such unpaid amount
equal to six percent (6%) of such late payment.
The Maker waives presentment for payment, protest and
demand, and notice of protest, demand and/or dishonor and
nonpayment of this Note, notice of any Event of Default under
this Note and the Security Instruments except as specifically
provided herein and therein, and waives all other notices or
demands otherwise required by law that the Maker may lawfully
waive. The Maker expressly agrees that this Note, or any payment
hereunder, may be extended from time to time, without in any way
affecting the liability of the Maker. No unilateral consent or
waiver by the Lender with respect to any action or failure to act
which, without consent, would constitute a breach of any
provision of this Note shall be valid and binding unless in
writing and signed by the Lender.
The rights and obligations of the Maker and all provisions
hereof shall be governed by and construed in accordance with the
laws of the State of New Hampshire.
The Maker shall remain primarily liable on this Note and the
Security Instruments until full payment, unaffected by any
alienation of the Mortgaged Premises, by any agreement or
transaction between the Lender and any subsequent owner or
alienee of the Mortgaged Premises as to payment of principal,
interest or other monies, by any forbearance or extension of
time, guaranty or assumption by others, or by any other matter,
as to all of which notice is hereby waived by the Maker.
IN WITNESS WHEREOF, the Maker has caused this Note to be
executed and delivered on the day and year first above written.
Micronetics, Inc.
Xxxxxxx X. Xxxxxxxxx By:Xxxxx Xxxxxxx
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witness Its President
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