EXHIBIT 10.12
TERM NOTE
$1,000,000.00 May 10, 1996
Columbus, Ohio
FOR VALUE RECEIVED, D.P.E.C., Inc., an Ohio corporation (hereinafter
called the "Borrower"), promises to pay to the order of Carol A. Clark
(hereinafter called "Clark", which term shall include any holder hereof) at such
place as Clark may designate or, in the absence of such designation, at 1679 Old
Henderson Road, Columbus, Ohio 43220, the principal sum of One Million Dollars
($1,000,000) (hereinafter called the "Principal Sum"), together with interest as
hereinafter provided, and payable at the time(s) and in the manner(s)
hereinafter provided. The Borrower further agrees that Clark's calculation of
the amount outstanding shall be rebuttably presumptive evidence of the amount of
the Principal Sum and of the amount of any accrued interest.
Interest
Interest will accrue on the unpaid balance of the Principal Sum until
paid at a variable rate of interest per annum, which shall change in the manner
set forth below, equal to the sum of (i) one hundred (100) basis points, plus
(ii) the Prime Commercial Rate.
All interest shall be calculated on the basis of a 360 day year for the
actual number of days the Principal Sum or any part thereof remains unpaid.
There shall be no penalty for prepayment.
As used herein, Prime Commercial Rate shall mean the rate established
by The Huntington National Bank ("HNB") from time to time based on its
consideration of economic, money market, business and competitive factors, and
it is not necessarily HNB's most favored rate. The rate of interest on the
obligation evidenced hereby shall change automatically without notice to the
Borrower immediately with each change in the Prime Commercial Rate.
Manner of Payment
The Borrower shall pay consecutive monthly installments of INTEREST
ONLY on the Principal Sum commencing on June 10, 1996 and continuing on the same
day of each month thereafter until and including November 10, 1997. Thereafter,
the Principal Sum and interest thereon shall be payable in monthly installments
of principal and interest in an amount sufficient to amortize the Principal Sum
over a term of eighty-four (84) months, with the first installment due on
December 10, 1997 and continuing on the same day of each month thereafter until
November 10, 2004, at which time the entire unpaid balance of the Principal Sum
plus accrued interest shall be due and payable
immediately. Each payment shall be applied first to costs, then to interest,
then to the Principal Sum.
Late Charge; Default Rate
Any installment or other payment not made within 10 days of the date
such installment or payment is due shall be subject to a late charge equal to 5%
of the amount of the installment or payment. During any period when any Event of
Default shall have occurred and be continuing, or upon maturity of this Note (by
acceleration or otherwise), the entire unpaid Principal Sum shall bear interest
from the date of such Event of Default until paid in full (after as well as
before judgment) at a fluctuating rate per annum equal to two hundred (200)
basis points above the rate which would otherwise be applicable.
Additional Covenants
Until payment in full of this Note, the Borrower shall provide, or
cause to be provided, to Clark within 15 days after end of each calendar
quarter, a certification of the Borrower stating that no material adverse change
has occurred in the Borrower's financial condition, individually or in the
aggregate, since the prior certificate was submitted to Clark.
Default
An "Event of Default" shall exist if any of the following occurs and is
continuing (a) in the case of any monetary default, 10 days after Clark gives
the Borrower notice thereof, and (b) in the case of any non-monetary default, 20
days after Clark gives the Borrower notice thereof:
(a) the Borrower fails to make any payment of principal or
interest of this Note on or before the date such payment is due;
(b) the Borrower fails to comply with any other provision of
this Note;
(c) the Borrower fails to perform or observe any covenant
contained in any mortgage, guaranty, security agreement or other agreement in
favor of HNB (all collectively referred to as the "Loan Documents");
(d) any warranty, representation or other statement by or on
behalf of the Borrower, contained in this Note or in any instrument furnished in
compliance with or in reference to this Note or the Loan Documents is false or
misleading in any material respect;
(e) the Borrower becomes insolvent or makes an assignment for
the benefit of creditors, or consents to the appointment of a trustee, receiver
or liquidator;
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(f) bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings are instituted by or against the Borrower and, in the
case of any involuntary proceeding is not dismissed within 60 days;
(g) a final judgment or judgments for the payment of money
aggregating in excess of $50,000 is or are outstanding against the Borrower and
any such judgment or judgments have not been discharged in full or stayed; or
(h) the occurrence of any event which allows the acceleration
of the maturity of any indebtedness of the Borrower by HNB or any of HNB's
affiliates.
Notwithstanding the above, no Event of Default shall exist with respect
to any failure on the part of the Borrower to make payments hereunder which are
prohibited by Section 3.08 of the Second Amended and Restated Shareholders
Agreement dated May 10, 1996 to which the Borrower and Clark are parties.
Default; Remedies
If an Event of Default exists, Clark may immediately exercise any
right, power or remedy permitted to Clark by law or any provision of this Note
or the Loan Documents, and shall have, in particular, without limiting the
generality of the foregoing, the right to declare the entire principal and all
interest accrued on this Note to be forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower.
Rights of Borrower
Borrower has executed and delivered to HNB a Guaranty of even date
herewith (the "Guaranty") with respect to Clark's $800,000 Note to HNB (the
"Clark Note"). By accepting delivery of Borrower's Note to Clark, Clark agrees
that the aggregate amount outstanding on such Note shall be reduced by the
aggregate of all amounts Borrower is required to pay to HNB on the Clark Note
pursuant to the Guaranty.
General Provisions
All of the parties hereto, including the Borrower, and any indorser,
surety or guarantor, hereby severally waive presentment, notice of dishonor,
protest, notice of protest, and diligence in bringing suit against any party
hereto, and consent that, without discharging any of them, the time of payment
may be extended an unlimited number of times before or after maturity without
notice. Clark shall not be required to pursue any party hereto, including any
guarantor, or to exercise any rights against any collateral herefor before
exercising any other such rights.
The obligations evidenced hereby from time to time may be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security
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interest or mortgage which secures the obligations evidenced hereby shall remain
in full force and effect notwithstanding any such substitution, renewal, or
extension.
The captions used herein are for reference only and shall not be deemed
a part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected.
This Note and the rights and obligations of Clark and the Borrower
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of Ohio. The Borrower agrees that any legal suit,
action or proceeding arising out of or relating to this Note may be instituted
in a state or federal court of appropriate subject matter jurisdiction in the
State of Ohio; waives any objection which it may have now or hereafter to the
venue of any such suit, action or proceeding; and irrevocably submits to the
jurisdiction of any such court in any such suit, action or proceeding.
The Borrower hereby irrevocably authorizes any attorney-at-law,
including any attorney-at-law employed or retained by Clark, to appear for the
Borrower in any action on this Note at any time after the same becomes due as
herein provided, in any court of record situated in Franklin County, Ohio (which
the Borrower acknowledges to be the place where this Note was executed), in the
county where the Borrower then has its place of business or can be found, to
waive the issuing and service of process, and confess a judgment in favor of the
holder of this Note against the Borrower for the amount that may then be due,
with interest at the rate provided for herein, together with the costs of suit,
and to waive and release all errors in said proceedings and the right to appeal
from the judgment rendered. The Borrower consents to the jurisdiction and venue
of such court. The Borrower waives any conflict of interest that any
attorney-at-law employed or retained by Clark may have in confessing judgment
hereunder and consents to the payment of a legal fee to any attorney-at-law
confessing judgment hereunder.
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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.
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D.P.E.C., INC.
By: /s/ Carol Clark
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Title: /s/ Its President
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