TERM NOTE Exhibit 10.9
$5,000,000.00 Brookings, South Dakota
December 8, 2000
FOR VALUE RECEIVED, Daktronics, Inc., a South Dakota corporation
("Borrower"), hereby promises to pay to the order of U.S. Bank National
Association, a national banking association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender", which term shall include
any future holder hereof), at or at such other place as Lender may from time to
time designate in writing, in lawful money of the United States of America, the
principal sum of Five Million and No/100 Dollars ($5,000,000.00) or so much
thereof as may be advanced hereunder and to pay interest on the outstanding
principal balance hereof from time to time at the rate of eight and 29/100
percent (8.29%) per annum. Interest shall be computed on the basis of actual
days elapsed and year of 360 days. Equal installments of principal and interest
shall be paid in the sum of One-Hundred, Two Thousand, One-Hundred, Ninety-Three
and No/100 Dollars ($102, 193.00) commencing on the first day of January, 2001
and continuing on the first day of each month thereafter through December 1,
2005 (the "Term Maturity Date") at which time all accrued interest and remaining
principal will be due.
Borrower acknowledges and agrees as follows: (I) Borrower has no right to
prepay the Note, except upon payment of the prepayment indemnity provided for
herein; (ii) Lender will be harmed by reason of any prepayment of the Note at
time when interest rates have declined below the levels prevailing at the time
funds were advanced under the Note or, if earlier, the date Lender locked in the
interest rate on the Note, because any reinvestment of the prepaid funds at the
lower return to Lender; (iii) there is no readily available index of rates
payable on loans such as that from Lender to Borrower, nor any assurance that
▇▇▇▇▇▇ could replace the loan with a similar loan; and (iv) changes in the
yields on U.S. government securities provide a reasonable approximation for
changes in interest rates generally.
Now, therefore, to induce ▇▇▇▇▇▇ to agree to accept voluntary prepayments,
▇▇▇▇▇▇▇▇ agrees to pay ▇▇▇▇▇▇ a prepayment indemnity as described in the Note
upon any prepayment, whether voluntary, mandatory or upon acceleration of the
Note, and agrees to all of the other terms of prepayment herein.
As used herein, all capitalized terms not otherwise defined herein have the
meanings assigned to them in the Note, and the following terms have the meanings
assigned to them:
"Average Initial Maturity Period" means the weighted average time to
scheduled maturity of the Note. Average Initial Maturity Period shall be
computed by multiplying the dollar amount of each installment of principal of
the Note by the number of days from the Note Date until the scheduled maturity
of that installment, adding together the resulting products and dividing the
resulting sum by the total dollar amount of principal of the Note.
"Average Remaining Maturity Period" means the weighted average time to
scheduled maturity of the amount prepaid. Average Remaining Maturity Period
shall be computed by multiplying the dollar amount of each installment of
principal prepaid by the number of days from the prepayment date until the
scheduled maturity of that installment, adding together the resulting products
and dividing the resulting sum by the total dollar amount of principal being
prepaid.
"Government Yield" means the annual yield (converted as necessary to the
equivalent semi-annual compound rate) on a U.S. Treasury security having a
maturity date closest to the date computed by adding (I) for the Government
Yield as of the Note Date, the Average Initial Maturity period to the Note Date
or (ii) for the Government Yield as of the prepayment date, the Average
Remaining Maturity Period to the date of prepayment, as published in The Wall
Street Journal (or, if not so published, as determined by Lender based on
quotations by secondary market dealers selected by Lender). "U.S. Treasury
securities" means actively traded U.S. Treasury bonds, bills and notes. If more
than one issue of U.S. Treasury securities is scheduled to mature at or about
the time of such computed date, then to the extent possible the U.S. Treasury
security trading closest to its par value will be chosen as the basis of the
Government Yield.
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"Interest Differential" means the Government Yield as of the Note Date
minus the Government Yield as of the prepayment date.
"Note Date" means the date that the Note is funded or such other date that
Lender locks in the interest rate in effect on the Note as of the date
prepayment.
Any voluntary prepayment under the Note shall be either in the full amount
of the outstanding loans under the Note or, if a partial prepayment, in the
amount of [$100,000] or an integral multiple thereof, and partial prepayments
shall be applied to installments due under the Note in inverse order of their
maturities. If, at the time of any prepayment (whether voluntary, mandatory or
upon acceleration of the Note), the Interest Differential shall exceed zero,
such prepayment shall be accompanied by payment of a prepayment indemnity. The
amount of the prepayment indemnity shall equal the present value (determined by
Lender using the Government Yield as of the date of prepayment as the discount
factor) on the prepayment date of a stream of equal monthly payments in number
equal to the number of whole months (using a thirty-day month) in the Average
Remaining Maturity Period. The amount of each such monthly payment shall equal
the quotient obtained by dividing (a) the product of the amount prepaid, times
the Interest Differential, times a fraction, the numerator of which is the
number of days in the Average Remaining Maturity Period and the denominator of
which is 360, by (b) the number of whole months (using a thirty-day month) in
the Average Remaining Maturity Period.
Failure to exercise any option provided herein shall not constitute a
waiver of the right to exercise the same in the event of any subsequent default.
▇▇▇▇▇▇▇▇ agrees that if, and as often as, this Note is given to an attorney for
collection or to defend or enforce any of ▇▇▇▇▇▇'s rights hereunder, ▇▇▇▇▇▇▇▇
will pay to the ▇▇▇▇▇▇ ▇▇▇▇▇▇'s reasonable attorney's fees together with all
court costs and other expenses paid by ▇▇▇▇▇▇.
Borrower waives presentment, protest and demand, notice of protest, demand
and of dishonor and nonpayment of this Note and any lack of diligence or delays
in collection or enforcement of this Note. ▇▇▇▇▇▇▇▇ agrees that this Note, or
any payment hereunder, may be extended from time to time, and ▇▇▇▇▇▇▇▇ consents
to the release of any party liable for the obligation evidenced by this Note,
the release of any of security for this Note, the acceptance of any other
security therefore, or any other indulgence for forbearance whatsoever, all
without notice to any party and without affecting the liability of Borrower.
THE NOTE SHALL BE CONSTRUED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
SOUTH DAKOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS OR PRINCIPLES THEREOF,
BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL
BANKS. WHENEVER POSSIBLE, EACH PROVISION OF THIS NOTE AND ANY OTHER STATEMENT,
INSTRUMENT OR TRANSACTION CONTEMPLATED HEREBY OR RELATING HERETO, SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER SUCH APPLICABLE
LAW, BUT, IF ANY PROVISION OF THIS NOTE OR ANY OTHER STATEMENT, INSTRUMENT OR
TRANSACTION CONTEMPLATED HEREBY OR RELATING HERETO SHALL BE HELD TO BE
PROHIBITED OR INVALID UNDER SUCH APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE ONLY TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
NOTE OR ANY OTHER STATEMENT, INSTRUMENT OR TRANSACTION CONTEMPLATED HEREBY OR
RELATING HERETO.
AT THE OPTION OF LENDER, THIS NOTE MAY BY ENFORCED IN ANY FEDERAL COURT OR
SOUTH DAKOTA CIRCUIT COURT SITTING IN SIOUX FALLS OR BROOKINGS, SOUTH DAKOTA;
AND BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES
ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT BORROWER
COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS
NOTE, LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE
OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
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ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Borrower and ▇▇▇▇▇▇ each irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or relating to this Note or any of
the Loan Documents (as defined in the Loan Agreement) or the transactions
contemplated hereby or thereby.
DAKTRONICS, INC.
By
-------------------------------------
Its President
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