PROMISSORY NOTE
Borrower: POMEROY COMPUTER RESOURCES, INC.; ET. AL.
1020 PETERSBURG RD.
HEBRON, KY 41048
Lender: STAR BANK, NATIONAL ASSOCIATION
REGIONAL DIVISION
425 WALNUT STREET
CINCINNATI, OH 45202
Principal Amount: $10,000,000.00
Initial Rate: 7.500% Date of Note: April 30, 1997
PROMISE TO PAY. POMEROY COMPUTER RESOURCES, INC., C & N CORP.,
XENAS COMMUNICATIONS CORP. and POMEROY COMPUTER LEASING COMPANY,
INC. (referred to in this Note individually and collectively as
'Borrower') jointly and severally promise to pay to STAR BANK,
NATIONAL ASSOCIATION (-Lender'), or order, in lawful money of the
United States of America,
the principal amount of Ten Million & 00/100 Dollars ($10,000,000.00)
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each
advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on July 31, 1997.
on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing. Unless otherwise
agreed or required by applicable law, payments will be applied first to
accrued unpaid interest, then to principal, and any remaining amount to
any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an index which is Lender's
Prime Rate (the 'Index'). This is the rate Lender charges, or would
charge, on 90-day unsecured loans to the most creditworthy corporate
customers. This rate may or may not be the lowest rate available from
Lender at any given time. Lender will tell Borrower the current Index
rate upon Borrower's request. Borrower understands that Lender may
make loans based on other rates as well. The interest rate change will
not occur more often than each DAY. The Index currently is 8.500% per
annum. The interest rate to be applied to the unpaid principal balance
of this Note will be at a rate of 1.000 percentage point under the
Index, resulting in an initial rate of 7.500% per annum. NOTICE: Under
no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full
prepayment of this Note, Borrower understands that Lender is entitled
to a minimum interest charge of $50.00. Other than Borrower's
obligation to pay any minimum interest charge, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 5.000% of the regularly scheduled payment or $50.00, whichever
is greater.
DEFAULT- Borrower. will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks
any promise Borrower has made to Lender, or Borrower fails to comply
with or to perform when due any other term, obligation, covenant, or
condition contained in this Note or any agreement related to this Note,
or in any other agreement or loan Borrower has with Lender. (c) Any
representation or statement made or furnished to Lender by Borrower or
on Borrower's behalf is false or misleading in any material respect
either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under
any bankruptcy or insolvency laws. (e) Any creditor tries to take any
of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts
with Lender. (f) Any guarantor dies or any of the other events
described in this default section occurs with respect to any guarantor
of this Note. (g) A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired. (h) Lender in good faith
deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, without notice, and then Borrower will pay that
amount. Upon default, including failure to pay upon final maturity,
Lender, at its option, may also, if permitted under applicable law,
increase the variable interest rate on this Note 3.000 percentage
points. The interest rate will not exceed the maximum rate permitted
by applicable law. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not
there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted
by Lender in the State of Ohio. If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of
HAMILTON County, the State of Ohio. Lender and Borrower hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other. This Note
shall be governed by and construed in accordance with the laws of the
State of Ohio.
CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and
empowers any attorney-at-law, including an attorney hired by Lender, to
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appear in any court of record and to confess judgment against Borrower
for the unpaid amount of this Note as evidenced by an affidavit signed
by an officer of Lender setting forth the amount then due, plus
attorneys' fees as provided in this Note, plus costs of suit, and to
release all errors,. and waive all rights of appeal. If a copy of this
Note, verified by an affidavit, shall have been filed in the
proceeding, it will not be necessary to file the original as a warrant
of attorney. Borrower waives the right to any stay of execution and
the benefit of all exemption laws now or hereafter in effect. No
single exercise of the foregoing warrant and power to confess judgment
will be deemed to exhaust the power, whether or not any such exercise
shall be held by any court to be invalid, voidable, or void; but the
p6wer -will'c6ntinu'd undiminished and may be exercised from time to
time as Lender may elect until all amounts owing on this Note have been
paid in full. Borrower waives any conflict of interest that an
attorney hired by Lender may have in acting on behalf of Borrower in
confessing judgment against Borrower while such attorney is retained by
Lender. Borrower expressly consents to such attorney acting for
Borrower in confessing judgment.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if
Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges,
and transfers to Lender all Borrower's right, title and interest in and
to, Borrower's accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future,
excluding however all IRA and Keogh accounts, and all trust accounts
for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on this Note against any and all
such accounts.
COLLATERAL. This Note is secured by SECURITY AGREEMENT COVERING ALL
ASSETS IN THE NAMES OF POMEROY COMPUTER RESOURCES, INC., C & N CORP.,
XENAS COMMUNICATIONS CORP., AND POMEROY COMPUTER LEASING COMPANY, INC.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested orally by Borrower or as
provided in this paragraph. Lender may, but need not, require that all
oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to
be directed to Lender's office shown above. ADVANCES UNDER THIS NOTE
MAY BE REQUESTED IN AMOUNTS OF $25,000.00 OR GREATER. ANY REQUEST FOR
ADVANCES OF LESS THAN $25,000.00 WILL NOT BE
HONORED. Borrower agrees to be liable for all sums either: (a) advanced
in accordance with the instructions of an authorized person or (b))
credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including
daily computer print-outs. Lender will have no obligation to advance
funds under this Note if: (a) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection
with the signing of this Note; (b)) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such guarantor's guarantee
of this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than those
authorized by Lender; or (e) Lender in good faith deems itself insecure
under this Note or any other agreement between Lender and Borrower.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note. In particular, this section
means (among other things) that Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for, charge,
collect, take, reserve or receive (collectively referred to herein as
'charge or collect'), any amount in the nature of interest or in the
nature of a fee for this loan, which would in any way or event
(including demand, prepayment, or acceleration) cause Lender to charge
or collect more for this loan than the maximum Lender would be permitted
to charge or collect by federal law or the law of the State of Ohio (as
applicable). Any such excess interest or unauthorized fee shall,
instead of anything stated to the contrary, be applied first to reduce
the principal balance of this loan, and when the principal has been paid
in full, be refunded to Borrower. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Each
Borrower understands and agrees that, with or without notice to
Borrower, Lender may with respect to any other Borrower (a) make one or
more additional secured or unsecured loans or otherwise extend
additional credit; (b) after, compromise, renew, extend, accelerate, or
otherwise change one or more times the time for payment or other terms
any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate,
fail or decide not to perfect, and release any security, with or without
the substitution of new collateral-, (d) apply such security and direct
the order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security
agreements, as Lender in its discretion may determine; (e) release,
substitute, agree not to sue, or deal with any one or more of Borrower's
sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; and (f) determine how, when and what application of
payments and credits shall be made on any other indebtedness owing by
such other borrower. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan, or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone.
All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and
several.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES TO THE TERMS OF
THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
NOTICE: FOR THIS NOTICE "YOU' MEANS THE BORROWER AND 'HIS' MEANS
LENDER.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE
TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A
COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
BORROWER:
POMEROY COMPUTER RESOURCES INC.
C & N CORP.
XENAS COMMUNICATIONS CORPORATION, INC
By:
EDWIN S. WEINSTEIN, TREASURER
POMEROY COMPUTER LEASING COMPANY, INC., Co-Borrower
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