PROMISSORY NOTE
$4,500,000.00 Note Date: April 30, 2002
Maturity Date: April 30, 2009
FOR VALUE RECEIVED, the undersigned, HURCO COMPANIES, INC., an Indiana
corporation, ("Maker"), hereby unconditionally promises to pay to the order of
AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY ("Payee"), at P. O. Box 71216,
Des Moines, Iowa 50325, or such other address as the holder hereof may, from
time to time designate in writing, the principal sum of Four Million Five
Hundred Thousand Dollars ($4,500,000), in lawful money of the United States of
America, together with interest on the unpaid principal balance from day-to-day
remaining computed from the date of advance until maturity at a rate per annum
equal to seven and three-eights percent (7.375%) (the "Fixed Rate").
For purposes of calculating interest accrued hereon at the Fixed Rate,
interest on this Note shall be calculated on the basis of the actual days
elapsed over a 360-day year and monthly payments of principal and interest shall
be calculated on the basis of a twenty-year amortization schedule.
Principal and accrued interest on this Note, computed as aforesaid,
shall be due and payable as follows: (i) in equal monthly installments, each in
the amount of Thirty-five Thousand Nine Hundred Eight and 52/100 Dollars
($35,908.52), commencing on June 1, 2002 (the "Initial Payment Date"), and
continuing thereafter on the first day of each succeeding calendar month, and
(ii) in one final installment on April __, 2009, (the "Maturity Date"). MAKER
ACKNOWLEDGES THAT THE MONTHLY INSTALLMENTS REFERRED TO ABOVE WILL NOT AMORTIZE
ALL OF THE PRINCIPAL SUM OF THE INDEBTEDNESS BY THE MATURITY DATE, RESULTING IN
A "BALLOON PAYMENT" ON SAID MATURITY DATE OF THE ENTIRE UNPAID PRINCIPAL BALANCE
OF THIS NOTE AND ACCRUED UNPAID INTEREST. Maker shall pay to Payee at the time
of execution hereof interest from and including the date of advance until, but
not including the day which is one calendar month preceding the date of the
Initial Payment Date. Monthly payments shall also be made on the Initial Payment
Date and each subsequent payment date by Maker to the reserve fund created by
Payee for the payment of all ground rentals, insurance premiums, taxes and
assessments, as required in the Mortgage, as hereinafter defined.
All payments on account of the indebtedness evidenced by this Note
shall be applied: (i) first, to further advances, if any, made by the holder
hereof as provided in the Mortgage (as hereinafter defined); (ii) next, to any
Late Charge (as hereinafter defined); (iii) next, to interest at the Default
Rate (as hereinafter defined), if applicable; (iv) next, to the Prepayment
Premium (as hereinafter defined), if applicable; (v) next, to interest at the
Fixed Rate on the unpaid principal balance of this Note unless interest at the
Default Rate is applicable; and (vi) lastly, any remainder to reduce the unpaid
principal of this Note.
In addition to the foregoing required monthly payments, Maker shall pay
to the Payee a late charge equal to the lesser of (a) One Thousand Dollars
($1,000), or (b) five percent (5%) of any payment required to be made hereunder
or under the Mortgage (as hereinafter defined) with respect to any payment which
is not received in full by the Payee within five (5) days after it becomes due
("Late Charge").
Should the final payment of principal of this Note become due and
payable on any day other than a business day, the maturity thereof shall be
extended to the next succeeding business day and interest shall be payable with
respect to such extension. All payments of principal of and interest upon this
Note shall be made by Maker to Payee in immediately available funds.
After an Event of Default (as hereinafter defined), all past due
principal and, to the extent permitted by applicable law, interest upon this
Note shall bear interest at the lesser of (i) the Maximum Rate (as hereinafter
defined), or (ii) the rate per annum which shall from day-to-day be equal to
three percent (3%) in excess of the Fixed Rate ("Default Rate"). Such Default
Rate shall apply to any period before or after any judgment on this Note.
The term "Maximum Rate," as used herein, shall mean, with respect to
the holder hereof, the maximum nonusurious interest rate, if any, that at any
time, or from time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note under the laws which are
presently in effect of the United States and the State of Indiana applicable to
such holder and such indebtedness or, to the extent permitted by applicable law,
under such applicable laws of the United States and the State of Indiana which
may hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
Maker and each surety, endorser, guarantor and other party ever liable
for payment of any sums of money payable on this Note, jointly and severally
waive demand for payment, presentment, protest, notice of protest and
non-payment, or other notice of default, notice of acceleration and intention to
accelerate, and agree that their liability under this Note shall not be affected
by any renewal or extension in the time of payment hereof, or by any
indulgences, or by any release or change in any security for the payment of this
Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes, regardless of the number of such renewals, extensions,
indulgences, releases or changes.
This Note is secured by, among other things, a Mortgage, Security
Agreement, Financing Statement and Assignment of Rents (the "Mortgage") dated of
even date herewith from Maker to Payee, covering certain real property located
in Marion County, Indiana ("Premises"), as more fully described therein.
No waiver by Payee of any of its rights or remedies hereunder or under
any other document evidencing or securing this Note or otherwise shall be
considered a waiver of any other subsequent right or remedy of Payee; no delay
or omission in the exercise or enforcement by Payee of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Payee; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Payee.
An "Event of Default" shall exist hereunder if any one or more of the
following events shall occur and be continuing:
(a) Maker shall fail or refuse to pay within five (5)
days after the date when due any principal of, or interest upon,
this Note;
(b) any statement, representation or warranty made by
Maker to Payee shall prove to be untrue or inaccurate in any material
respect when made;
(c) default shall occur in the performance of any of the
covenants or agreements of Maker contained herein or in any instrument
securing this Note or any other document executed or delivered to Payee
in connection herewith and such default shall continue uncured to the
reasonable satisfaction of Payee for a period of fifteen (15) days
after written notice thereof from Payee to Maker;
(d) Maker or any guarantor of this Note (a "Guarantor") shall
(i) apply for or consent to the appointment of a receiver, trustee,
custodian, intervenor or liquidator of such Maker or such Guarantor or
of all or a substantial part of the assets of such Maker or such
Guarantor, (ii) file a voluntary petition in bankruptcy, admit in
writing that such Maker or such Guarantor is unable to pay the debts of
such Maker or such Guarantor as they become due or generally not pay
such Person's debts as they become due, (iii) make a general assignment
for the benefit of creditors, (iv) file a petition or answer seeking
reorganization or an arrangement with creditors or to take advantage of
any bankruptcy or insolvency laws, (v) file an answer admitting the
material allegations of, or consent to, or default in answering, a
petition filed against such Maker or such Guarantor in any bankruptcy,
reorganization or insolvency proceeding, or (vi) take corporate action
for the purpose of effecting any of the foregoing;
(e) An involuntary petition or complaint shall be filed
against Maker or any Guarantor seeking bankruptcy or reorganization of
such Maker or such Guarantor or the appointment of a receiver,
custodian, trustee, intervenor or liquidator of such Maker or such
Guarantor, or of all or substantially all of the assets of such Maker
or such Guarantor, and such petition or complaint shall not have been
dismissed within forty-five (45) days of the filing thereof; or an
order, order for relief, judgment or decree shall be entered by any
court of competent jurisdiction or other competent authority approving
a petition or complaint seeking reorganization of such Maker or such
Guarantor or appointing a receiver, custodian, trustee, intervenor or
liquidator of such Maker or such Guarantor, or of all or substantially
all of the assets of the Maker or such Guarantor;
(f) the failure of Maker or any Guarantor to pay any uninsured
money judgment against such Maker or such Guarantor within thirty (30)
days after such judgment becomes final and no longer appealable;
(g) the failure of Maker or any Guarantor to have discharged
within a period of thirty (30) days after the commencement thereof any
attachment, sequestration, or similar proceedings against any of
Maker's or any Guarantor's assets; or
(h) Payee's liens, mortgages or security interests in any of
the collateral for this Note should become unenforceable, or cease to
be first priority liens, mortgages or security interests, except for
liens of real estate taxes which are due, but not delinquent, provided
Maker is not in default in the payment of real estate tax reserve
deposits to Payee.
Upon the occurrence of any Event of Default or other default under any
other agreement or instrument securing or assuring the payment of this Note or
executed in connection herewith, the holder hereof may, at its option, declare
the entire unpaid balance of principal and accrued interest on this Note to be
immediately due and payable, and foreclose all liens and security interests
securing payment hereof or any part hereof; provided, however, upon the
occurrence of any of the Events of Default described in items (a), (d) or (e)
above, the entire unpaid balance of principal and accrued interest upon this
Note shall, without any action by Payee, immediately become due and payable
without demand for payment, presentment, protest, notice of protest and
non-payment, or other notice of default, notice of acceleration and intention to
accelerate or any other notice, all of which are expressly waived by Maker.
Maker may prepay the outstanding principal balance of this Note, in
whole but not in part, upon giving thirty (30) days' prior written notice to
Payee if, and only if, contemporaneously with such prepayment Maker pays to
Payee a prepayment premium equal to the product of (i) the percentage set forth
below opposite the period in which prepayment occurs, multiplied by (ii) the
amount of principal prepaid on this Note ("Prepayment Premium").
Period Percentage
Date hereof through the day Seven Percent (7%)
preceding the First Anniversary
of the date hereof
First Anniversary Date Five Percent (5%)
through the day preceding
the Second Anniversary
Second Anniversary Date Four Percent (4%)
through the day preceding
the Third Anniversary
Third Anniversary Date Three Percent (3%)
through the day preceding
the Fourth Anniversary
Fourth Anniversary Date Two Percent (2%)
through the day preceding
the Fifth Anniversary
On and after Fifth Anniversary No Prepayment Premium
Maker hereby acknowledges and agrees that in the event Maker is in
default under this Note or the Mortgage or any other instrument by which this
Note is secured, thereby causing the Payee to accelerate the maturity of this
Note, then the Payee will sustain damage due to additional administrative
expenses and the loss of the investment represented hereby. Therefore, Maker
hereby agrees to pay the Payee damages in an amount which shall be equal to the
Prepayment Premium applicable on the date of such acceleration. Notwithstanding
the foregoing, Maker shall be permitted to prepay up to ten percent (10%) of the
then-existing Note balance each year without a Prepayment Penalty, provided that
(a) Payee is given not less than thirty (30) days advance written notice of
intent to prepay; (b) the prepayment occurs on an anniversary date, and (c) the
monthly payments required under this Note remain the same. The annual prepayment
right shall not be cumulative from one year to any subsequent year.
Notwithstanding anything in this Note to the contrary, there shall at
no time be any limitation on Maker's liability for the payment to Payee of:
(i) all loss, damage, costs, expense and liability (including
without limitation, reasonable attorneys' fees and costs)
directly or indirectly incurred by Payee (and its directors,
officers, employees and agents) arising out of or attributable
to the installation, use, generation, manufacture, production,
storage, release, threatened release, discharge, disposal or
presence of a Hazardous Substance (as defined in the
Mortgage), or from the presence of any underground storage
tanks, in, on, under or about the Premises, including without
limitation, (a) all foreseeable consequential damages, (b) the
cost of any required or necessary repair, cleanup or
detoxification of the Premises and (c) the preparation and
implementation of any closure, remedial or other required
plans, or damages arising from the presence of any toxic or
hazardous waste or substances, or underground storage tanks,
or any other pollutants in or on the Premises.
(ii) any loss (including any Prepayment Premium), cost or
expense resulting from acceleration of the maturity of the
Note due to application of the "due on sale" or "further
encumbrance" provisions contained in the Mortgage, or
(iii) any transfer or other taxes, costs and reasonable
attorneys' fees incurred by Payee in connection with the
enforcement of the Loan Documents.
Notwithstanding anything contained in this Note to the contrary, Payee
shall never be deemed to have contracted for or be entitled to receive, collect
or apply as interest on this Note, any amount in excess of the amount permitted
and calculated at the Maximum Rate, and, in the event Payee ever receives,
collects or applies as interest any amount in excess of the amount permitted and
calculated at the Maximum Rate, such amount which would be excessive interest
shall be applied to the reduction of the unpaid principal balance of this Note,
and, if the principal balance of this Note is paid in full, any remaining excess
shall forthwith be paid to Maker. In determining whether or not the interest
paid or payable under any specific contingency exceeds the Maximum Rate, Maker
and Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment (other than payments which are expressly
designated as interest payments hereunder) as an expense, fee, or premium,
rather than as interest, (ii) exclude voluntary prepayments and the effect
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of this Note.
This Note is being executed and delivered, and is intended to be
performed in the State of Indiana. Except to the extent that the laws of the
United States may apply to the terms hereof, the substantive laws of the State
of Indiana shall govern the validity, construction, enforcement and
interpretation of this Note. In the event of a dispute involving this Note or
any other instruments executed in connection herewith, the undersigned
irrevocably agrees that venue for such dispute shall lie in any court of
competent jurisdiction in Marion County, Indiana.
If this Note is placed in the hands of an attorney for collection, or
if it is collected through any legal proceedings at law or in equity or in
bankruptcy, receivership or other court proceedings, Maker promises to pay all
costs and expenses of collection including, but not limited to, court costs and
the reasonable attorneys' fees of the holder hereof.
Executed as of the day and year first above written.
HURCO COMPANIES, INC.,
an Indiana corporation
By: /S/ Roger J. Wolf
-----------------
Roger J. Wolf, Senior Vice President
and Chief Financial Officer