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PROMISSORY NOTE
(Revolving Credit Facility)
$500,000.00 Norwich, Connecticut
October 23, 1999
FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to
the order of PEOPLE'S BANK ("Holder") at its office at 850 Main Street,
Bridgeport, Connecticut, the maximum principal sum of FIVE HUNDRED THOUSAND and
NO/100 ($500,000.00) DOLLARS, or so much thereof as may from time to time may be
advanced and is outstanding pursuant to the terms of the Revolving Loan
Agreement of even date herewith between Holder and Maker (the "Agreement"),
together with interest thereon at the rate hereafter provided for. All advances
of principal from Holder to Maker shall be made only in accordance with the
terms of the Agreement and all sums due hereunder shall be payable in full on
August 31, 2000 (the "Maturity Date").
Interest shall be charged on the outstanding principal balance at any
time outstanding from the date advanced at a floating rate equal to the Holder's
Prevailing Prime Rate from time to time in effect plus one and one-half (1.50%)
percent (the "Interest Rate"). The Interest Rate shall be adjusted on a daily
basis throughout the life of the Loan to equal the People's Bank Prevailing
Prime Rate as from time to time in effect.
The term "People's Bank Prevailing Prime Rate" means the per annum
interest rate from time to time determined by the Financial Division of Holder
in the exercise of its sole and exclusive judgment based upon rate information
provided by funding sources ordinarily used by Holder and/or upon national or
regional indices as made generally known by Holder's Financial Division to
Holder's lending staff. The Prime Rate is an interest rate of general
application by Holder but it is not necessarily the best or lowest interest rate
made available to its customers.
Maker shall make monthly payments of interest on principal advanced
pursuant to the terms of the Agreement as accrued at the Interest Rate from time
to time in effect,
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commencing on the 1st day of the month immediately following the first advance
of principal and continuing on the first day of each and every month thereafter
until the Maturity Date of August 31, 2000, when the entire balance of principal
and interest shall be due and payable.
Holder shall bill Maker for interest prior to its due date, provided,
however, that any failure of Holder to so bill Maker, or any error contained in
such billing, including but not limited to the calculation of interest, shall
not relieve Maker of its obligations hereunder.
The occurrence of any one of the following events shall constitute an
event of default hereunder and, at the sole election of Holder, the whole of the
principal sum, interest accrued thereon, and any and all indebtedness evidenced
hereby or otherwise due Holder shall accelerate and become immediately due and
payable without notice or demand of any kind:
(a) Failure to make any payment due Holder hereunder for more
than fifteen (15) days after same is due and payable.
(b) Failure to promptly observe, perform or comply with any
other obligation, condition or covenant to be observed, performed or
complied with by Maker under this Note which failure shall continue for
a period of thirty (30) days after notice of such default by Holder to
Maker provided, however, the same shall not constitute an Event of
Default as long as maker commences to cure such default within said
thirty (30) day period and thereafter diligently pursues such cure.
(c) The happening of any event, condition or situation,
permitting the Holder to accelerate the maturity of any indebtedness
hereby evidenced, including, but not by way of limitation, each of the
following acts, omissions, breaches, failures or non-compliance,
events, conditions or situations provided same continue beyond any
express cure period: [i] default under any term of the Agreement,
including but not limited to financial covenants therein contained
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which default continues beyond any express grace or cure period therein
expressly provided for; or [ii] default under the Guaranty of the
Connecticut Development Authority securing this Note; or [iii] default
under the Security Agreement securing this Note which default continues
beyond any express grace or cure period therein expressly provided for;
or default of Maker's obligations under any subordination agreement to
the benefit of Holder; or [iv] default under any other document or
agreement of Maker to the benefit of Holder, whether securing or
further evidencing the obligations herein described or otherwise, which
default continues beyond any express grace or cure period expressly
provided for.
(d) The filing by or against the Grantor of any petition,
arrangement, reorganization, or the like under any insolvency or
bankruptcy law, or the adjudication of Maker as a bankrupt, or the
making of an assignment for the benefit of creditors, or the
appointment of a receiver for any part of any of Maker's properties.
Notwithstanding the above, Maker shall have sixty (60) days to cure or
otherwise dismiss any involuntary petition or other involuntary action
filed against him Maker.
The failure of Holder to exercise such option to accelerate the indebtedness
hereby evidenced shall not constitute a waiver of the right to exercise the same
in the event of any subsequent default.
Total or partial prepayment may be made at any time and from time to
time without payment of a prepayment fee.
Maker agrees to pay all taxes levied or assessed upon this Note other
than taxes upon income to Holder and to pay all reasonable costs, expenses and
attorneys fees incurred by Holder in any proceedings for collection of this Note
and in protecting or sustaining any security interest given Holder. Maker hereby
gives Holder a lien and right of setoff for all Maker's liabilities upon and
against all the deposits, credits, collateral and property of Maker, now or
hereafter in the possession or control of Holder or in transit to it
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including but not limited to special accounts and certificates of deposit
whether or not matured. Holder may, in the event of default in the payment of
obligations hereunder, or upon the occurrence of any event or condition which
would constitute such an event of default after, in each case, the expiration of
any express grace period, if any, apply or set off the same, or any part
thereof, to any liability of Maker. If Maker is indebted to the Holder under any
other obligation, then a default in that obligation which continues beyond any
applicable express grace or cure period shall be a default under this
obligation. Conversely, default under this obligation which continues after any
applicable grace period shall be a default under any other obligation.
MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A COMMERCIAL
TRANSACTION AND WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF
THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY THE LAW OF ANY
STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER MAY
DESIRE TO USE, AND FURTHER, WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT
AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR HEREIN, NOTICE OF NONPAYMENT,
PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THIS
NOTE, AND ALL RIGHTS UNDER ANY STATUTE OF LIMITATIONS, AND AGREES THAT THE TIME
FOR PAYMENT OF THIS NOTE MAY BE CHANGED AND EXTENDED AT HOLDER'S SOLE
DISCRETION, WITHOUT IMPAIRING ITS LIABILITY THEREON, AND FURTHER CONSENTS TO THE
RELEASE OF ALL OR ANY PART OF THE SECURITY FOR THE PAYMENT HEREOF AT THE
DISCRETION OF HOLDER, OR THE RELEASE OF ANY PARTY LIABLE FOR THIS OBLIGATION
WITHOUT AFFECTING THE LIABILITY OF THE MAKER HEREUNDER. ANY DELAY ON THE PART OF
THE HOLDER IN EXERCISING ANY RIGHT HEREUNDER SHALL NOT OPERATE AS A WAIVER OF
ANY SUCH RIGHT, AND ANY WAIVER GRANTED FOR ONE OCCASION SHALL NOT OPERATE AS A
WAIVER IN THE EVENT OF ANY SUBSEQUENT DEFAULT.
TO THE EXTENT ALLOWED BY LAW, MAKER DOES HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH IT MAY BE A PARTY ARISING OUT
OF OR PERTAINING DIRECTLY OR INDIRECTLY TO THIS TRANSACTION.
Any delay on the part of Holder in exercising any right
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hereunder shall not operate as a waiver of any such right, and any waiver
granted for one occasion shall not operate as a waiver in the event of any
subsequent default.
All notices to Maker required under this Note, if any, shall be deemed
to have been made upon the third business day following the mailing of same by
United States mail, certified, return receipt requested, postage prepaid, or by
commercial courier with the delivery charges prepaid, to the following address:
"Gunther International, Ltd., One Winnenden Road, Norwich, Connecticut 06360" or
such other address as Maker may notice in writing to Holder.
THE RIGHTS AND OBLIGATIONS OF MAKER HEREUNDER, INCLUDING BUT NOT
LIMITED TO THE CIRCUMSTANCES UNDER WHICH PRINCIPAL IS TO BE ADVANCED, ARE
GOVERNED BY THE TERMS OF THE AGREEMENT WHICH ARE INCORPORATED HEREIN BY
REFERENCE.
This Note shall bind the successors and assigns of each Maker and all
endorsers hereto and shall inure to the benefit of the Holder, its successors
and assigns.
This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut.
GUNTHER INTERNATIONAL, LTD.
By /s/ Marc Perkins
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Its Chief Executive Officer
Duly Authorized
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