EXHIBIT 10.2
TERM LOAN NOTE
$20,000,000.00 August 31, ▇▇▇▇
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1. AGREEMENT TO PAY. FOR VALUE RECEIVED, FORTUNE INDUSTRIES, INC., an
Indiana corporation ("BORROWER"), hereby promises to pay to the order of FIFTH
THIRD BANK (CENTRAL INDIANA), its successors and assigns ("LENDER"), the
principal sum of Twenty Million Dollars and No Cents ($20,000,000.00) ("LOAN"),
pursuant to that certain Loan and Security Agreement of even date herewith
between Borrower and Lender ("LOAN AGREEMENT") at the place and in the manner
hereinafter provided, together with interest thereon at the rate or rates
described below, and any and all other amounts which may be due and payable
hereunder from time to time without relief from valuation or appraisement laws.
2. INTEREST RATE. Interest shall accrue on the outstanding principal
balance of this Note from the date hereof through the Term Loan Maturity Date at
the Loan Rate set forth in the Loan Agreement.
3. PAYMENT TERMS.
3.1 PRINCIPAL AND INTEREST. Payments of principal and interest due
under this Note, if not sooner declared to be due in accordance with the
provisions hereof, shall be made as follows:
(a) Commencing on October 5, 2006 and on the fifth day of each
calendar month thereafter, principal payments in the amount of One
Hundred Sixty-Six Thousand Six Hundred Sixty-Seven Dollars and No
Cents ($166,667.00) together with accrued interest shall be due and
payable.
(b) The unpaid principal balance of this Note, if not sooner paid
or declared to be due in accordance with the terms hereof, together
with all accrued and unpaid interest thereon and any other amounts due
and payable hereunder or under any other Loan Document (as hereinafter
defined), shall be due and payable in full at the Term Loan Maturity
Date.
3.2 APPLICATION OF PAYMENTS. Prior to the occurrence of an Event of
Default, all payments and prepayments on account of the indebtedness
evidenced by this Note shall be applied as follows: (a) first, to fees,
expenses, costs and other similar amounts then due and payable to Lender,
including, without limitation any prepayment premium, exit fee or late
charges due hereunder, (b) second, to accrued and unpaid interest on the
principal balance of this Note, (c) third, to the
payment of principal due in the month in which the payment or prepayment is
made, (d) fourth, to any escrows, impounds or other amounts which may then
be due and payable under the Loan Documents, (e) fifth, to any other
amounts then due Lender hereunder or under any of the Loan Documents, and
(f) last, to the unpaid principal balance of this Note. Any prepayment on
account of the indebtedness evidenced by this Note shall not extend or
postpone the due date or reduce the amount of any subsequent payment of
interest due hereunder. After an Event of Default has occurred and is
continuing, payments may be applied by Lender to amounts owed hereunder and
under the Loan Documents in such order as Lender shall determine, in its
sole discretion.
3.3 METHOD OF PAYMENTS. All payments of principal and interest
hereunder shall be paid by automatic debit, wire transfer, check or in coin
or currency which, at the time or times of payment, is the legal tender for
public and private debts in the United States of America and shall be made
at such place as Lender or the legal holder or holders of this Note may
from time to time appoint in the payment invoice or otherwise in writing,
and in the absence of such appointment, then at the offices of Lender at
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made by check shall be deemed paid on the date Lender receives such check;
provided, however, that if such check is subsequently returned to Lender
unpaid due to insufficient funds or otherwise, the payment shall not be
deemed to have been made and shall continue to bear interest until
collected. Notwithstanding the foregoing, the final payment due under this
Note must be made by wire transfer or other final funds. If requested by
Borrower, interest, principal payments and any fees and expenses owed
Lender from time to time will be deducted by Lender automatically on the
due date from Borrower's account with Lender, as designated in writing by
Borrower. Borrower will maintain sufficient funds in the account on the
dates Lender enters debits authorized by this Note. If there are
insufficient funds in the account on the date Lender enters any debit
authorized by this Note, the debit will be reversed. Borrower may terminate
this direct debit arrangement at any time by sending written notice to
Lender at the address specified in the Loan Agreement.
3.4 LATE CHARGE. If any payment of interest or principal due hereunder
is not made within ten days after such payment is due in accordance with
the terms hereof, then, in addition to the payment of the amount so due,
Borrower shall pay to Lender a "late charge" of the greater of: (i) five
cents for each whole dollar so overdue or (ii) Twenty-Five Dollars ($25.00)
to defray part of the cost of collection and handling such late payment.
Borrower agrees that the damages to be sustained by the holder hereof for
the detriment caused by any late payment are extremely difficult and
impractical to ascertain, and that the amount of five cents for each one
dollar due is a reasonable estimate of such damages, does not constitute
interest, and is not a penalty.
4. SECURITY. This Note is secured by the Loan Agreement (the Loan Agreement
and any other document now or hereafter given to evidence or secure payment of
this Note or delivered to induce Lender to disburse the proceeds of the Loan,
as such documents may hereafter be amended, restated or replaced from time to
time, are hereinafter collectively referred to as the "LOAN DOCUMENTS").
Reference is hereby made to the Loan Documents (which are incorporated herein by
reference as fully and with the same effect as if set forth herein at length)
for a statement of the covenants and agreements contained therein, a statement
of the rights, remedies, and security afforded thereby, and all matters therein
contained.
5. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an "EVENT OF DEFAULT" under this Note:
5.1 the failure by Borrower to pay (i) any installment of principal or
interest payable pursuant to this Note within ten (10) days of the date
when due, or (ii) any other amount payable to Lender under this Note or any
of the other Loan Documents within ten (10) days of when any such payment
is due in accordance with the terms hereof or thereof; or
5.2 the occurrence of any "Event of Default" under any of the Loan
Documents.
6. REMEDIES. At the election of the holder hereof, and without notice, the
principal balance remaining unpaid under this Note, and all unpaid interest
accrued thereon and any other amounts due hereunder, shall be and become
immediately due and payable in full upon the occurrence of any Event of Default.
Failure to exercise this option shall not constitute a waiver of the right to
exercise same in the event of any subsequent Event of Default. No holder hereof
shall, by any act of omission or commission, be deemed to waive any of its
rights, remedies or powers hereunder or otherwise unless such waiver is in
writing and signed by the holder hereof, and then only to the extent
specifically set forth therein. The rights, remedies and powers of the holder
hereof, as provided in this Note, the Loan Agreement and in all of the other
Loan Documents are cumulative and concurrent, and may be pursued singly,
successively or together against Borrower, any guarantor thereof, the security
given at any time to secure the repayment hereof, all at the sole discretion of
the holder hereof. If any suit or action is instituted or attorneys are employed
to collect this Note or any part hereof, Borrower promises and agrees to pay all
costs of collection, including reasonable attorneys' fees and court costs.
7. COVENANTS AND WAIVERS. Borrower and all others who now or may at any
time become liable for all or any part of the obligations evidenced hereby,
expressly agree hereby to be jointly and severally bound, and jointly and
severally: (i) waive and renounce any and all homestead, redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness evidenced by this Note or by any extension or renewal
hereof; (ii) waive presentment and demand for payment, notices of nonpayment and
of dishonor, protest of dishonor, and notice of protest; (iii) except as
expressly provided in the Loan Documents, waive any and all notices in
connection with the delivery and acceptance hereof and all other notices in
connection with the performance, default, or enforcement of the payment hereof
or hereunder; (iv) waive any and all lack of diligence and delays in the
enforcement of the payment
hereof; (v) agree that the liability of Borrower, guarantor, endorser or obligor
shall be unconditional and without regard to the liability of any other person
or entity for the payment hereof, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Lender to any of them with
respect hereto; (vi) consent to any and all extensions of time, renewals,
waivers, or modifications that may be granted by Lender with respect to the
payment or other provisions hereof, and to the release of any security at any
time given for the payment hereof, or any part thereof, with or without
substitution, and to the release of any person or entity liable for the payment
hereof; and (vii) consent to the addition of any and all other makers,
endorsers, guarantors, and other obligors for the payment hereof, and to the
acceptance of any and all other security for the payment hereof, and agree that
the addition of any such makers, endorsers, guarantors or other obligors, or
security shall not affect the liability of Borrower, any guarantor and all
others now liable for all or any part of the obligations evidenced hereby. This
provision is a material inducement for Lender making the Loan to Borrower.
8. OTHER GENERAL AGREEMENTS.
8.1 The Loan is a business loan and is not being made for personal,
family or household purposes. Borrower agrees that the Loan evidenced by
this Note is an exempted transaction under the Truth In Lending Act, 15
U.S.C., Section 1601, et seq.
8.2 Time is of the essence hereof.
8.3 This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the
statutes, laws and decisions of the State of Indiana. This Note may not be
changed or amended orally but only by an instrument in writing signed by
the party against whom enforcement of the change or amendment is sought.
8.4 Lender shall not be construed for any purpose to be a partner,
joint venturer, agent or associate of Borrower or of any lessee, operator,
concessionaire or licensee of Borrower in the conduct of its business, and
by the execution of this Note, Borrower agrees to indemnify, defend, and
hold Lender harmless from and against any and all damages, costs, expenses
and liability that may be incurred by Lender as a result of a claim that
Lender is such partner, joint venturer, agent or associate.
8.5 This Note has been made and delivered at Indianapolis, Indiana and
all funds disbursed to or for the benefit of Borrower will be disbursed in
Indianapolis, Indiana.
8.6 The obligations and liabilities of Borrower under this Note shall
be binding upon and enforceable against Borrower and its successors and
assigns. This Note shall inure to the benefit of and may be enforced by
Lender and its successors and assigns.
8.7 If any provision of this Note is deemed to be invalid by reason of
the operation of law, or by reason of the interpretation placed thereon by
any administrative agency or any court, Borrower and Lender shall negotiate
an equitable adjustment in the provisions of the same in order to effect,
to the maximum extent permitted by law, the purpose of this and the
validity and enforceability of the remaining provisions, or portions or
applications thereof, shall not be affected thereby and shall remain in
full force and effect.
8.8 If the interest provisions herein or in any of the Loan Documents
shall result, at any time during the Loan, in an effective rate of interest
which, for any month, exceeds the limit of usury or other laws applicable
to the Loan, all sums in excess of those lawfully collectible as interest
of the period in question shall, without further agreement or notice
between or by any party hereto, be applied upon principal immediately upon
receipt of such monies by Lender, with the same force and effect as though
the payer has specifically designated such extra sums to be so applied to
principal and Lender had agreed to accept such extra payment(s) as a
premium-free prepayment. Notwithstanding the foregoing, however, Lender may
at any time and from time to time elect by notice in writing to Borrower to
reduce or limit the collection to such sums which, when added to the said
first-stated interest, shall not result in any payments toward principal in
accordance with the requirements of the preceding sentence. In no event
shall any agreed to or actual exaction as consideration for this Loan
transcend the limits imposed or provided by the law applicable to this
transaction or the makers hereof in the jurisdiction in which the
Collateral is located for the use or detention of money or for forbearance
in seeking its collection.
8.9 Lender may at any time assign its rights in this Note and the Loan
Documents, or any part thereof and transfer its rights in any or all of the
Collateral, and Lender thereafter shall be relieved from all liability with
respect to such Collateral. In addition, Lender may at any time sell one or
more participations in the Note. Borrower may not assign its interest in
this Note, or any other agreement with Lender or any portion thereof,
either voluntarily or by operation of law, without the prior written
consent of Lender.
8.10 Capitalized terms not defined herein shall have the same meaning
given to them in the Loan Agreement.
9. NOTICES. All notices required under this Note will be in writing and
will be transmitted in the manner and to the addresses or facsimile numbers
required by the Loan Agreement, or to such other addresses or facsimile numbers
as Lender and Borrower may specify from time to time in writing.
10. CONSENT TO JURISDICTION. TO INDUCE LENDER TO ACCEPT THIS NOTE, BORROWER
IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S SOLE AND ABSOLUTE ELECTION, ALL
ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE WILL BE
LITIGATED IN COURTS HAVING SITUS IN INDIANAPOLIS,
INDIANA. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT
LOCATED WITHIN INDIANAPOLIS, INDIANA, WAIVES PERSONAL SERVICE OF PROCESS UPON
BORROWER, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL DIRECTED TO BORROWER AT THE ADDRESS STATED IN THE LOAN AGREEMENT AND
SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.
11. WAIVER OF JURY TRIAL. BORROWER AND LENDER (BY ACCEPTANCE OF THIS NOTE),
HAVING BEEN REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS (A) UNDER THIS NOTE OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION WITH THIS NOTE OR (B) ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS NOTE, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
BORROWER AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST LENDER ON ANY THEORY
OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
DAMAGES.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the
day and year first written above.
BORROWER:
FORTUNE INDUSTRIES, INC.,
an Indiana corporation
By:
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Printed:
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Title:
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STATE OF INDIANA )
) SS:
COUNTY OF ___________)
Before me, a Notary Public in and for said County and State, personally
appeared _______________, the _______________ of Fortune Industries, Inc., an
Indiana corporation, who, after having been duly sworn, acknowledged the
execution of the foregoing Term Loan Note for and on behalf of such corporation.
Witness my hand and Notarial Seal this _____ day of August, 2006.
________________________________________
Notary Public
________________________________________
Printed
My Commission Expires:
_____________________________________
My County of Residence:
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