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EXHIBIT 10.4(g)
REVOLVING PROMISSORY NOTE
(RLT)
$1,200,000.00 Phoenix, Arizona
March 28, 1997
FOR VALUE RECEIVED, the undersigned BOWMAR INSTRUMENT CORPORATION, an
Indiana corporation (hereinafter called "Maker"), promises to pay to the order
of BANK ONE, ARIZONA, NA, a national banking association (the "Payee"; Payee and
each subsequent transferee and/or owner of this Note, whether taking by
endorsement or otherwise, are herein successively called "Holder") at Post
Office Box 71, Phoenix, Arizona 85001, Attention: Commercial Banking A593, or at
such other place as Holder may from time to time designate in writing, the
principal sum of ONE MILLION TWO HUNDRED THOUSAND AND NO/100 DOLLARS
($1,200,000.00) or so much thereof as Holder may advance to or for the benefit
of Maker plus interest calculated on a daily basis (based on a 360-day year)
from the date hereof on the principal balance from time to time outstanding as
hereinafter provided, principal, interest and all other sums payable hereunder
to be paid in lawful money of the United States of America as follows:
A. Interest shall accrue on the unpaid principal balance of
this Note at the Floating Rate, provided, that Maker may elect, upon
written notice that is received by Holder at least ten (10) days prior
to the Conversion Date, that interest on the entire outstanding
principal balance of this Note accrue at the Conversion Rate, in which
case, commencing on the Conversion Date and continuing thereafter,
interest shall accrue at the Conversion Rate. During the period that
interest accrues at the Floating Rate, the interest rate on this Note
shall change from time to time on the effective date of, and in
conformity with, changes in the Prime Rate.
B. All accrued interest shall be due and payable on each
Payment Date prior to the RLT Termination Date.
C. Commencing on the first Payment Date on or after the RLT
Termination Date and continuing on each Payment Date thereafter, unless
and until Maker shall elect that interest accrue under this Note at the
Conversion Rate, monthly installments of interest and principal shall
be due and payable on each Payment Date each in a principal amount
sufficient to amortize the principal balance outstanding on the RLT
Termination Date over forty-eight (48) equal monthly installments, plus
all accrued and unpaid interest.
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D. Should Maker elect that this Note bear interest at the
Conversion Rate, equal payments of principal and interest shall be due
and payable in consecutive monthly installments commencing on the first
Payment Date after the Conversion Date, and continuing on each Payment
Date thereafter, each in an amount sufficient to fully amortize the
principal amount of this Note outstanding on the Conversion Date, at
the Conversion Rate, over an amortization period equal to forty-eight
(48) months less the number of full months that have elapsed between
the RLT Termination Date and the Conversion Date.
E. The entire unpaid principal balance, all accrued and unpaid
interest, and all other amounts payable under this Note shall be due
and payable in full on the Maturity Date.
As used in this Note:
"Business Day" means a day of the year on which banks are not
required or authorized to close in Phoenix, Arizona.
"Conversion Date" means the date, on or after the RLT
Termination Date, selected by Maker after which interest shall accrue
under this Note at the Conversion Rate.
"Conversion Rate" means the rate per annum equal to the sum
of (i) three and six tenths of one percent (3.60 %) per annum, and (ii)
the yield to maturity of Treasury Obligations having a maturity date
nearest to the Maturity Date determined two Business Days before the
Conversion Date. The maturity date and yield of said Treasury
Obligations shall be determined by Holder, in its absolute and sole
discretion, on the basis of quotations published in The Wall Street
Journal or other comparable sources.
"Default Rate" means an interest rate per annum equal to four
percent (4%) above the rate that would otherwise be payable under the
terms of the respective Notes.
"Floating Rate" means (A) prior to the RLT Termination Date,
the rate per annum equal to the sum of (i) one half of one percent
(0.5%) per annum, and (ii) the Prime Rate per annum as in effect from
time to time, and (B) commencing on the RLT Termination Date and
continuing thereafter, the rate per annum equal to the sum of (1) one
percent (1%) per annum, and (2) the Prime Rate per annum as in effect
from time to time. The Floating Rate will change on each day that the
"Prime Rate" changes.
"Maturity Date" means March 31, 2002.
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"Payment Date" means the first day of the first month after
the initial advance of proceeds under this Note and the first day of
each month thereafter, provided that if any such day is not a Business
Day, then such Payment Date should be the next successive Business Day.
"Prime Rate" means the interest rate per annum publicly
announced by Bank One, Arizona, NA, a national banking association, or
its successors, in Phoenix, Arizona as its "prime rate" as in effect
from time to time. Maker acknowledges that the Prime Rate is not
necessarily the best or lowest rate offered by such Bank and such Bank
may lend to its customers at rates that are at, above or below its
Prime Rate.
"RLT Termination Date" means the date that is twelve (12)
months after the date of this Note.
"Treasury Obligations" means United States Treasury debt
obligations.
Prior to the RLT Termination Date, the principal balance of this Note
represents a revolving credit all or any part of which may be advanced to Maker,
repaid by Maker, and re-advanced to Maker from time to time, subject to the
other terms hereof and the conditions, if any, contained in the Loan Agreement,
defined below, and provided that the principal balance outstanding at any one
time shall not exceed the face amount hereof. On and after the RLT Termination
Date, this Note shall no longer constitute a revolving line of credit and no
further advances hereunder shall be made to Maker.
Maker agrees to an effective rate of interest that is the rate stated
above plus any additional rate of interest resulting from any other charges in
the nature of interest paid or to be paid by or on behalf of Maker, or any
benefit received or to be received by Holder, in connection with this Note.
If any payment required under this Note is not paid when due, within
fifteen (15) days after the date such payment is due, then, at the option of
Holder, Maker shall pay a "late charge" equal to four percent (4%) of the
amount of that payment to compensate Holder for administrative expenses and
other costs of delinquent payments. This late charge may be assessed without
notice, shall be immediately due and payable and shall be in addition to all
other rights and remedies available to Holder.
All payments made on this Note shall be applied, to the extent of the
amount thereof, in the order of priority to be determined by Holder in its sole
discretion: (i) to the payment of costs, fees or other charges incurred in
connection with the indebtedness evidenced hereby: (ii) to the payment of
accrued interest; and/or (iii) to the reduction of the principal balance.
This Note is issued pursuant to that Loan Agreement (as modified as
described below, the "Loan Agreement") dated August 28, 1995 between Maker and
Payee, as amended by that
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Modification Agreement dated April 26, 1996, the Second Modification
Agreement dated August 9, 1996 and that Third Modification Agreement of even
date herewith, and is secured by, among other things, Mortgages dated August
28, 1995, executed by Maker and Bowmar/ALI, Inc., a Massachusetts
corporation, as mortgagor in favor of Payee, as mortgagee, encumbering
property situate in Fort Wayne, Indiana and Acton, Massachusetts, as
modified by Modifications of Mortgage of even date herewith. Such Mortgages
and all other documents or instruments securing the indebtedness evidenced
by this Note or executed or delivered in connection with the indebtedness
evidenced by this Note are hereinafter called the "Security Documents."
Time is of the essence of this Note. At the option of Holder, the
entire unpaid principal balance, all accrued and unpaid interest and all
other amounts payable hereunder shall become immediately due and payable
without notice upon the failure to pay any sum due and owing hereunder as
provided herein if such failure continues for fifteen (15) days after notice
thereof to Maker or upon the occurrence of any Event of Default, as defined
in the Loan Agreement or any of the Security Documents.
After maturity, including maturity upon acceleration, the unpaid
principal balance, all accrued and unpaid interest and all other amounts
payable hereunder shall bear interest at the Default Rate. Maker shall pay
all costs and expenses, including reasonable attorneys' fees and court
costs, incurred in the collection or enforcement of all or any part of this
Note. All such costs and expenses shall be secured by the Mortgages and by
all other Security Documents. In the event of any court proceedings, court
costs and attorneys' fees shall be set by the court and not by jury and
shall be included in any judgment obtained by Holder or Maker.
Maker may prepay the outstanding principal balance hereof, in
whole or in part, at any time prior to the Maturity Date. Subject to
the right of Maker to prepay this Note in full without prepayment
premium in the event the RLC (as defined in the Loan Agreement) is not
renewed by Holder upon any scheduled maturity thereunder, after the
Conversion Date, with any such prepayments (whether made voluntarily or
involuntarily as a result of an acceleration of the Maturity Date or
otherwise), Maker shall also pay (a) all accrued and unpaid interest on
the principal being prepaid, (b) all other amounts then due and
payable by Maker to Holder under this Note, the Loan Agreement and the
Security Documents, and (c) a prepayment premium, if any, equal to the
product of (i) the Average Lost Monthly Interest Income and (ii) the
number of months from the date of prepayment to the Maturity Date (with
any fraction of a month counted as a month), discounted to present
value at the Discount Rate over a period equal to one-half of the
number of months in (ii) above. At the option of Holder, in its
absolute and sole discretion, any prepayment shall be applied to
installments coming due hereunder in the inverse order of their due
dates.
As used in the preceding paragraph:
"Average Lost Monthly Interest Income" means the amount
determined by dividing (i) the product of the Average Principal and the
Lost Rate, by (ii) 12, where:
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"Average Principal" means the amount equal to either
(i) one half the sum of (A) the amount of principal being
prepaid and (B) the amount of principal that is scheduled to
be due on the Maturity Date ("Balloon Amount"), or (ii) the
amount of principal being prepaid, if such amount is less
than the Balloon Amount; and
"Lost Rate" means the rate per annum equal to the
percentage, if any, by which (i) the yield to maturity of
Treasury Obligations having a maturity date nearest to the
Maturity Date determined on the date hereof exceeds (ii) the
yield to maturity of Treasury Obligations having a maturity
date nearest to the Maturity Date determined on the date of
prepayment.
"Discount Rate" means the rate per annum equal to the yield to
maturity of Treasury Obligations having a maturity date nearest to the
Maturity Date determined on the date of prepayment.
The maturity date and yield to maturity of Treasury Obligations shall be
determined by Holder, in its absolute and sole discretion, on the basis of
quotations published in The Wall Street Journal or other comparable sources.
Failure of Holder to exercise any option hereunder shall not constitute
a waiver of the right to exercise the same in the event of any subsequent
default or in the event of continuance of any existing default after demand for
strict performance hereof.
Maker and all sureties, guarantors and/or endorsers hereof (or of any
obligation hereunder) and accommodation parties hereon (severally each
hereinafter called a "Surety") each: (a) agree that the liability under this
Note of all parties hereto is joint and several; (b) severally waive any
exemption laws and right thereunder affecting the full collection of this Note;
(c) severally waive any and all formalities in connection with this Note to the
maximum extent allowed by law, including (but not limited to) demand, diligence,
presentment for payment, protest and demand, and notice of extension, dishonor,
protest, demand and nonpayment of this Note; and (d) consent that Holder may
extend the time of payment or otherwise modify the terms of payment of any part
or the whole of the debt evidenced by this Note, at the request of any other
person liable hereon, and such consent shall not alter nor diminish the
liability of any person hereon.
In addition, each Surety waives and agrees not to assert: (a) any right
to require Holder to proceed against Maker or any other Surety, to proceed
against or exhaust any security for the Note, to pursue any other remedy
available to Holder, or to pursue any remedy in any particular order or manner;
(b) the benefit of any statute of limitations affecting its liability hereunder
or the enforcement hereof; (c) the benefits of any legal or equitable doctrine
or principle of marshalling; (d) notice of the existence, creation or incurring
of new or additional indebtedness of Maker to Holder; (e) the benefits of any
statutory provision limiting the liability of a surety, including without
limitation the provisions of Sections 12-1641, et seq., of the Arizona Revised
Statutes;
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(f) any defense arising by reason of any disability or other defense of Maker
or by reason of the cessation from any cause whatsoever (other than payment in
full) of the liability of Maker for payment of the Note; and (g) the benefits
of any statutory provision limiting the right of Holder to recover a
deficiency judgment, or to otherwise proceed against any person or entity
obligated for payment of the Note, after any foreclosure or trustee's sale of
any security for the Note, including without limitation the benefits, if any,
to a Surety of Arizona Revised Statutes Section 33-814. Until payment in full
of the Note, no Surety shall have any right of subrogation and each hereby
waives any right to enforce any remedy which Holder now has, or may hereafter
have, against Maker or any other Surety, and waives any benefit of, and any
right to participate in, any security now or hereafter held by Holder.
Maker agrees that to the extent Maker or any Surety makes any payment
to Holder in connection with the indebtedness evidenced by this Note, and all
or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by Holder or
paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then the indebtedness of Maker under this Note shall
continue or shall be reinstated, as the case may be, and, to the extent of
such payment or repayment by Holder, the indebtedness evidenced by this Note
or part thereof intended to be satisfied by such Preferential Payment shall be
revived and continued in full force and effect as if said Preferential Payment
had not been made.
Without limiting the right of Holder to bring any action or
proceeding against Maker or any Surety or against any property of Maker or any
Surety (an "Action") arising out of or relating to this Note or any
indebtedness evidenced hereby in the courts of other jurisdictions, Maker and
each Surety hereby irrevocably submit to the jurisdiction, process and venue
of any Arizona State or Federal court sitting in Phoenix, Arizona, and hereby
irrevocably agree that any Action may be heard and determined in such Arizona
State court or in such Federal court. Maker and all Sureties each hereby
irrevocably waives, to the fullest extent it may effectively do so, the
defenses of lack of jurisdiction over any person, inconvenient forum or
improper venue, to the maintenance of any Action in any jurisdiction.
This Note shall be binding upon Maker and its successors and assigns
and shall inure to the benefit of Payee, and any subsequent holders of this
Note, and their successors and assigns.
All notices required or permitted in connection with this Note shall
be given at the place and in the manner provided in the Loan Agreement for the
giving of notices.
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This Note shall be governed by and construed according to the laws of
the State of Arizona.
IN WITNESS WHEREOF, these presents are executed as of the date first
written above.
BOWMAR INSTRUMENT CORPORATION, an
Indiana corporation
By: /s/ Joseph G. Warren, Jr.
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Name: Joseph G. Warren, Jr.
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Title: Vice President
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MAKER
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