1
EXHIBIT 4(e)
REVOLVING CREDIT NOTE
$10,000,000.00 Hartford, Connecticut
December 9th, 1998
FOR VALUE RECEIVED, ACMAT Corporation, a Connecticut corporation with a
place of business in New Britain, Connecticut ("Maker") promises to pay to the
order of BankBoston, N.A., a national banking association having a place of
business in Hartford, Connecticut ("Payee"), or other holder of this Note, the
principal sum of TEN MILLION ($10,000,000.00) DOLLARS, or so much thereof as
shall from time to time be advanced by the Payee to the Maker and remain
outstanding, as conclusively evidenced by the books and records of Payee,
together with interest on the outstanding balance hereof before and after
maturity, at the rate hereinafter set forth until this Note shall have been
fully paid, all as hereinafter provided. Advances hereunder may be repaid by
Maker and readvanced by Payee from time to time.
Interest Rate. The from time to time outstanding balance hereof shall
bear interest at a rate per annum (the "Rate") which is at all times equal to
the Base Rate. The Base Rate is an index Payee uses to set interest rates on
certain types of loans and is not necessarily the lowest rate Payee charges to
its customers. Payee's Base Rate is increased and decreased from time to time
in response to changes in conditions. The Rate will be adjusted automatically
on each occasion on which the Payee's Base Rate changes.
LIBOR Option. At any time after the date hereof, provided no default
hereunder shall have occurred, the Maker may elect, pursuant to a Notice of
Interest Rate Election (as defined in the Agreement hereinafter referenced) to
have amounts outstanding hereunder bear interest at a rate per annum equal to
one and six tenths (1.6) percentage points per annum in excess of the LIBOR
Rate (as defined in the Agreement) for the Interest Period (as defined in the
Agreement) elected by Maker. No election may be made for a period that extends
beyond the maturity date of this Note.
Amounts outstanding hereunder shall bear interest at the Base Rate unless
otherwise so elected by Maker.
Payments. Commencing on January 1, 1999, and on the same day of each and
every month thereafter, Maker shall make payments of interest only, in arrears,
on the unpaid balance hereof at the Rate(s) aforesaid applicable during such
prior month, calculated based on a year of three hundred sixty (360) days but
for the actual number of days elapsed.
Maturity Date. The final maturity date of this Note shall be December 31,
2000, on which date the entire indebtedness evidenced by this Note, including
without limitation, the unpaid principal balance and unpaid interest accrued
thereon, shall be due and payable without notice or
1
2
demand. The maturity of this Note shall in no way be affected or altered as a
result of any increase or decrease in the Rate.
Prepayment. The Maker may prepay amounts outstanding under this Note
accruing interest at the Base Rate in whole or in part without prepayment
penalty or premium. Amounts outstanding hereunder accruing interest in relation
to the LIBOR Rate may only be prepaid if such prepayment is accompanied by the
Prepayment Premium as more particularly set forth in the Agreement.
Late Payments. In the event that any payment of principal or interest due
hereunder is not received by Payee within five (5) days after the same is due,
then the Maker agrees to pay to the Payee the additional sum of five (5%)
percent of the amount of such late payment to cover the additional expense of
Payee's handling of such late payment (but not as consideration for making such
late payment). Maker and Payee hereby agree that an exact computation of
Payee's damages relating to such late payment is impossible to ascertain, and
further agree that the percentage stated above is a reasonable estimation of
Payee's damages. Such estimation is based upon, inter alia, Payee's additional
expenses relating to (i) sending late notices, (ii) referring the matter to
Payee's collection department and (iii) providing for any necessary regulatory
compliance and reserve requirements.
Application of Payments. All payments hereon shall be applied to expenses
as provided herein, interest and principal in such order as Payee shall, in its
discretion, determine. Said sums shall be payable together with all lawful
taxes and assessments levied thereon, or upon this Note, or upon the Payee with
respect to the same, and together with all costs and expenses related to
collecting this Note and together with all costs and expenses of foreclosing or
protecting or sustaining the lien of any security which may be given to secure
the payment of this Note, and/or in any litigation or controversy arising from
or connected with this Note and/or any collateral securing this Note and/or the
Agreement hereinafter referred to and/or incurred in any action brought by the
holder of a prior lien in which the Payee is a party defendant, including
without limitation reasonable attorneys' fees. Said obligation to pay the
reasonable attorneys' fees of the Payee in connection with protecting,
enforcing or realizing of the rights and remedies above described shall exist
whether or not proceedings are instituted or court appearance is made on behalf
of the Payee.
Set Off. Upon the occurrence of an Event of Default the Payee shall have
and may exercise a right of set-off for the payment of this Note and the
aforesaid costs and expenses against, and Maker hereby gives and grants to
Payee a security interest (perfected by Payee's possession thereof) in, all
deposits, monies, securities and property left with the Payee and/or any
affiliate of the Payee by the Maker or by any guarantor, endorser or otherwise
to the credit of or belonging to the Maker or any such party, and the Payee
shall have full power and authority at any time and without prior notice to
sell, assign and deliver any such property at public or private sale, and apply
the proceeds in satisfaction hereof.
Commercial Credit Agreement. This Note is issued under and pursuant to
the terms of a Commercial Credit Agreement of even date (the "Agreement") by
and among the Maker, the Payee and ACSTAR Holdings, Inc., a Delaware
corporation, as Guarantor, which Agreement is in the possession of the Payee.
2
3
Guarantee. Additionally, payment of this Note is guaranteed pursuant
to Guaranty Agreement of even date executed and delivered by ACSTAR Holdings,
Inc.
Default. Upon the occurrence of any Event of Default, as such term is
defined in the Agreement or if any payment specified herein shall remain in
arrears and unpaid for a period of ten (10) days after the same shall become
due, at the option of Payee, (i) the interest rate accruing hereunder shall,
from such default, be increased by three (3%) percentage points per annum above
the Base Rate (the "Default Rate"), such Default Rate to change when and as
said Base Rate changes, and (ii) this Note shall become forthwith due and
payable without presentment, demand, protest or notice of any kind, all of
which being hereby expressly waived by the undersigned. Without in any way
limiting the generality of the foregoing the interest rate accruing hereunder
shall be the Default Rate (i) upon the option of Payee and (ii) only during the
period when Payee is not also collecting a late payment charge hereunder. Maker
and Payee hereby agree that any Event of Default or default in any payments of
principal or interest hereunder results in, inter alia, additional
administrative costs, regulatory costs, reserve requirements, and credit costs
to Payee. Maker and Payee further agree that such Default Rate approximates the
interest rate Payee might charge to borrowers with sub-standard credit. In the
event the Default Rate exceeds the maximum rate of interest allowed by law, the
Default Rate shall be reduced so as to equal the maximum rate of interest
allowed by law.
Reimbursement for Costs. If the Payee shall deem applicable to this
Note (including, in each case, the borrowed and the unused portion thereof, if
any) any requirement of any law of the United States of America, any
regulation, order, interpretation, ruling, official directive or guideline
(whether or not having the force of law) of the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation or any other board or governmental or administrative
agency of the United States of America which shall impose, increase, modify or
make applicable to this Note or cause this Note to be included in, any reserve,
special deposit, calculation used in the computation of regulatory capital
standards, assessment or other requirement which imposes on the Payee any cost
that is attributable to the maintenance thereof, then, and in each such event,
the Maker shall promptly pay the Payee, upon its demand, such amount as will
compensate the Payee for any such cost. In the event any such cost is a
continuing cost, a fee payable to the Payee may be imposed upon the Maker
periodically for so long as any such cost is deemed applicable by the Payee, in
an amount determined by the Payee to be necessary to compensate the Payee for
any such cost, which determination may be based upon the Payee's reasonable
allocation of the aggregate of such costs resulting from such events. The
determination by the Payee of the existence and amount of any such costs shall,
in the absence of manifest error, be conclusive.
Successors and Assigns. This Note shall bind the Maker and the Maker's
successors and assigns and all endorsers hereto and shall inure to the benefit
of Payee and/or any subsequent holder of this Note and/or their respective
successors and assigns.
Partial Invalidity. In the event that any one or more of the
provisions of this Note shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part, or in any respect, or
3
4
in the event that any one or more of the provisions of this Note shall operate,
or would prospectively operate, to invalidate this Note, then, and in such
event, such provision or provisions only shall be deemed to be null and void and
of no force nor effect and shall not affect any other provision of this Note,
and the remaining provisions of this Note shall remain in full force and effect,
shall be valid, legal and enforceable, and shall in no way be affected,
prejudiced or disturbed thereby.
JOINT AND SEVERAL. The obligations of the Maker and of each and every
endorser, guarantor, and surety shall be joint and several.
MAKER ACKNOWLEDGES THAT THIS NOTE EVIDENCES A COMMERCIAL TRANSACTION AS
THAT TERM IS DEFINED IN CONNECTICUT GENERAL STATUTES SECTION 52-278a(a) AND
PURSUANT TO CONNECTICUT GENERAL STATUTES SECTIONS 52-278b AND 52-278f, MAKER
DOES HEREBY WAIVE ITS RIGHTS TO NOTICE AND HEARING PRIOR TO THE ISSUANCE BY THE
PAYEE OF ANY PREJUDGMENT REMEDY, AND MAKER FURTHER WAIVES ANY RIGHTS AS MAY
EXIST UNDER FEDERAL LAW TO ANY NOTICE AND/OR HEARING PRIOR TO THE PAYEE'S
OBTAINING AND EXERCISING ANY PREJUDGMENT REMEDY.
ADDITIONALLY, MAKER AND PAYEE HEREBY EACH WAIVES THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, DEFENSE, COUNTERCLAIM, CROSSCLAIM AND/OR ANY FORM OF PROCEEDING
BROUGHT IN CONNECTION WITH THIS NOTE OR RELATING TO ANY INDEBTEDNESS EVIDENCED
HEREBY AND/OR ANY COLLATERAL NOW OR HEREAFTER SECURING THIS NOTE.
THIS NOTE HAS BEEN MADE, EXECUTED AND DELIVERED IN THE STATE OF CONNECTICUT
AND SHALL BE CONSTRUED AND ENFORCED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CONNECTICUT.
The Maker hereby expressly waives to the full extent and for the maximum
period permitted by applicable law, the right to plead any statute of
limitations or any similar bar as a defense to any demand, claim or cause of
action based upon or arising from such failure to pay any part of the principal
of this Note or any interest thereon, which waiver as to each such failure shall
be separate and distinct from any such waivers or to each other such failure.
The waivers of notice and hearing for prejudgment remedies made herein are made
by the Maker on behalf of the Maker and the Maker's successors and assigns and
shall apply to any and all actions against such successors and assigns.
4
5
The Maker hereby waives presentment, demand, protest, notice of protest or
other notice of dishonor of any kind in any action to collect this Note or
relating to any collateral securing this Note.
ACMAT CORPORATION
By /s/ Henry Nozko Jr.
-----------------------------
Its COO
5