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EXHIBIT 4.1
REVOLVING CREDIT NOTE
LOANS UP TO:
Amount $6,000,000.00 No.
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Due Date: February 28, 1998 Date: February 12, 1997
PROMISE TO PAY - The undersigned, NEMATRON CORPORATION, a Michigan corporation,
for value received, promises to pay to KeyBank National Association, or its
assigns (hereinafter "Bank") or order after the above date of execution, the
sum of Six Million and No/100 Dollars ($6,000,000.00) to the extent such sum
has been advanced to the undersigned by the Bank and remains due and unpaid, as
indicated on the books and records of the Bank, plus interest as set forth
herein on February 28, 1998.
INTEREST RATE - The outstanding principal balance shall earn interest at rate
equal to the LIBOR Rate plus two and one half per cent (2.5%) per annum
("Effective Rate"), until maturity, but no more than the maximum rate allowed
by law. The "LIBOR Rate", as used herein, means the average rate [rounded up,
if necessary, to the next highest one sixteenth of one percent (1/16%)] of
interbank offered effective rates for thirty (30) day U.S. dollar deposits in
the London market based on quotations at major banks as determined by reference
to the Wall Street Journal("WSJ") edition published on its last publication
date of every month ("Determination Date") and distributed in Ann Arbor,
Michigan. In the event such average rate is not published in the WSJ or the
WSJ is not otherwise available to Bank on the Determination Date, Bank may use
the London interbank offered rate for thirty (30)day dollar deposits (or its
equivalent as determined in the sole discretion of Bank) as reported by any
nationally recognized financial reporting service on the Determination Date.
Borrower acknowledges that the published or reported LIBOR Rate may be with
respect to contracts entered into as of a date other than the Determination
Date.
The Effective Rate shall be adjusted as of the first day of each month based
the LIBOR Rate published or reported on the Determination Date, as applicable.
Interest shall accrue on the unpaid principal balance from the date of each
advance under this Note and be calculated upon the actual number of days
elapsed over a year assumed to have 360 days. Interest shall be payable monthly
beginning March 1, 1997, and on the first day of each month thereafter until
maturity of this note.
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The LIBOR Rate is used as an index only, and funds for Borrower's loans
are not being purchased or otherwise matched by the Bank from or on the London
InterBank Market.
DEFAULT RATE - Bank reserves the right to increase the interest rate after
default, whether by acceleration or otherwise, to a rate equal to the Effective
Rate plus three percent (3.00%) per annum, but no more than the maximum rate
allowed by law.
PRINCIPAL PAYMENTS - Except as set forth in Section 1.1.3 and Article VI
of a Loan Agreement dated September 30, 1996, as amended by a First
Amendment of even date ("Loan Agreement"), the undersigned shall pay the
entire unpaid principal and interest outstanding under this Note on
February 28, 1998.
APPLICATION OF PAYMENTS - Each payment will be applied first to interest, then
to costs, and the balance to principal.
FEES - Bank may charge a fee to cover additional administrative costs incurred
for any payment received by Bank six (6) business days or more after the due
date; such fee will be equal to two percent (2%) of the required principal
payment or $200.00, whichever is less. No payments will be accepted without
payment of this fee. In addition, Bank may charge a fee to cover
administrative costs incurred in origination and/or renewal of this Note, which
shall be payable upon execution of the Note.
SECURITY - To secure the payment of this Note and any or all other liabilities
of the undersigned to the Bank, howsoever arising or evidenced, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, several or joint, including any renewals, extensions,
modifications, etc., the undersigned hereby pledges to Bank and grants to Bank
a continuing security interest in the following described property, whether
real or personal, and in all additions, substitutions, and proceeds thereof:
(i) All property described in Security Agreements, Mortgages,
Assignments and Documents listed in Section 3.11 of the Loan
Agreement.
(ii) All securities and other property of the undersigned now or
hereafter in the possession or custody of the Bank, together with
substitutions, increments and proceeds;
(iii) Any other property declared or acknowledged to constitute security
for the indebtedness of the undersigned to the Bank, together with
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substitutions, increments and proceeds thereof, and
(iv) All balances of deposit accounts of the undersigned now or
at any time hereafter with the Bank.
The Bank shall have the right at any time to apply its own indebtedness or
liability to the undersigned or to any endorser or other party liable hereon in
whole or partial payment of this Note, either before or after its maturity, or
in whole or partial payment of any other liability due or to become due from
the undersigned to the Bank.
EVENTS OF DEFAULT - Any one of the following events shall be deemed a default
under the terms of this Note, triggering the Bank's remedies as provided under
statutory or contract law: (a) failure to pay any payment required under the
terms herein; (b) any default in the performance of any of the terms and
conditions of any document evidencing this loan transaction including this
Note, the security agreement, the mortgage, the loan agreement, etc.; (c) any
default in any terms and conditions of any other loan agreement between Bank
and the undersigned; (d) the death, dissolution, or insolvency of the
undersigned, or the appointment of a trustee or receiver for the undersigned,
or the making of any assignment for the benefit of creditors or the
commencement of any bankruptcy proceeding by or against the undersigned; (e)
the placement or issuance of any lien, levy, writ of garnishment or execution
or similar process against the undersigned or any property of the undersigned;
(f) the death of any guarantor of this Note.
REMEDIES ON DEFAULT - Upon the occurrence of any one or more of the above
events of default, unless the Bank shall otherwise elect, the full amount of
the indebtedness evidenced hereby and all other liabilities of the undersigned
to the Bank shall become immediately due and payable, without notice or demand.
Thereafter, Bank shall have all the rights and remedies provided by law,
whether common, statutory or otherwise, including all the remedies granted to
Bank under the Uniform Commercial Code, the right to offset any deposit
accounts held by Bank, the right to repossess and dispose of any collateral
pledged for this or any other loan agreement between Bank and the undersigned,
the right to foreclose any mortgage by advertisement as provided under Michigan
law, etc. The undersigned shall be liable for any deficiency remaining after
disposition of any property in which the Bank has a security interest to secure
payment of the indebtedness evidenced hereby, and the computation of such
deficiency or of the amount required to redeem such property shall include
actual attorneys' fees, legal expenses and any other costs incurred.
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WAIVER - Each endorser hereof and any other party liable for the indebtedness
evidenced hereby severally waives demand, presentment, notice of dishonor and
protest of this Note and consents to any extension or postponement of time of
its payment without limit as to the number or period thereof, to any
substitution, exchange or release of all or any part of the collateral securing
this Note, to the addition of any party hereto, and to the release or discharge
of or suspension of any rights and remedies against any person who may be
liable hereon for the payment of the indebtedness evidenced hereby.
MISCELLANEOUS - No delay on the part of the Bank in the exercise of any right
or remedy shall operate as a waiver thereof, no single or partial exercise by
the Bank of any right or remedy shall preclude any other future exercise
thereof or the exercise of any other right or remedy, and no waiver or
indulgence by the Bank of any default shall be effective unless in writing and
signed by the Bank, nor shall a waiver on one occasion be construed as a bar
to, or waiver of, any such right on any future occasion. The undersigned, if
more than one, shall be jointly and severally liable hereunder and the term
"undersigned" shall mean any one or more of them. Any reference to KeyBank
National Association or Bank herein shall be deemed to include any subsequent
holder of this Note.
NEMATRON CORPORATION
5840 Interface Drive
Ann Arbor, MI 48103 By: /s/ David P. Gienapp
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David P. Gienapp
Its: Vice President of Finance
and Administration and
Treasurer
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