EXHIBIT 10.2
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THIS NOTE CONSOLIDATES THAT NOTE DATED AUGUST 31, 1996 (AS EXTENDED
BY NOTE MODIFICATION AGREEMENT DATED AUGUST 20, 1997) IN THE
PRINCIPAL SUM OF $2,000,000.00, THAT NOTE DATED OCTOBER 2, 1997, IN
THE PRINCIPAL SUM OF $950,000.00, THAT NOTE DATED OCTOBER 2, 1997,
IN THE PRINCIPAL SUM OF $2,850,000.00, AND THAT NOTE DATED NOVEMBER
25, 1997 IN THE PRINCIPAL SUM OF $1,408,864.28, AND THAT NOTE DATED
NOVEMBER 25, 1997 IN THE PRINCIPAL SUM OF $7,791,135.72.
CONSOLIDATION
PROMISSORY NOTE
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Date of Execution: November 25, ▇▇▇▇
▇▇▇▇▇▇: $15,000,000.00
FOR VALUE RECEIVED, the undersigned ("Borrower") unconditionally
(and jointly and severally, if more than one) promise(s) to pay to
the order of NATIONSBANK, N.A., a National Banking Association
("Bank"), Sarasota (Banking Center) without setoff, at its offices
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ or at such
other place as may be designated by Bank, the principal amount of
FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00), or so much
thereof as may be advanced from time to time in immediately
available funds, together with interest computed daily on the
outstanding principal balance hereunder, at an annual interest
rate, and in accordance with the payment schedule, indicated below.
Rate
The Rate shall be the Bank's FLOATING LIBOR RATE as follows:
1. As used herein "FLOATING LIBOR RATE INDEX"
shall mean the fluctuating interest rate per annum published
in the Wall Street Journal at which deposits in U.S. dollars
are offered in the London interbank market on the date for
which the Bank's FLOATING LIBOR RATE is being calculated in an
amount equal to the outstanding amount of the loan and with a
term equal to thirty (30) days.
2. The Bank's FLOATING LIBOR RATE shall be
determined in accordance with the following:
(a) "Bank's FLOATING LIBOR RATE" shall be
equal to (A) the quotient (rounded up to
the nearest 1/16 of 1%) of (1) the
Floating Libor Rate Index, divided by (2)
an amount equal to one (1) minus the
appropriate reserve requirement imposed
on Bank by the Federal Reserve System, if
any, plus (B) 1.5%. With each change in
the FLOATING LIBOR RATE INDEX the Bank's
FLOATING LIBOR RATE shall change
effective on the date the FLOATING LIBOR
RATE INDEX changes.
(b) The Borrower shall pay to Bank, from time
to time and on demand, any sum(s)
required to compensate the Bank for any
additional cost (such as, but not limited
to, a reserve requirement) incurred by
the Bank at any time which (i) is
attributable to the Bank's obtaining a
deposit or deposits to cover the
outstanding principal balance for which
the Borrower has elected to pay or Bank's
FLOATING LIBOR RATE, (ii) decreases the
effective spread or yield represented by
the 1.5% Floating Libor Rate component,
that would be earned by the Bank but for
such cost, and (iii) is caused or
occasioned by any presently existing or
subsequently introduced law, rule,
regulations or other requirement (or by
any change therein, changed effect or
interpretation thereof or change in the
Bank's cost of complying therewith)
imposed, interpreted, administered or
enforced by any federal, state or other
governmental or monetary authority, which
is imposed on or applied to the Bank or
any assets held by, deposits or accounts
in or with, or credits extended by the
Bank. The Bank shall notify the Borrower
from time to time of any such additional
cost and such notice shall be binding and
conclusive evidence of the Borrower's
obligation to pay the stated sum upon
receipt of the notice.
(c) The Bank's reference to and use of the
FLOATING LIBOR RATE INDEX to define and
determine the Bank's FLOATING LIBOR RATE,
shall not obligate the Bank to obtain
funds from any particular source in order
to charge interest at the Bank's FLOATING
LIBOR RATE.
Notwithstanding any other provision contained in this Note,
Bank does not intend to charge and Borrower shall not be
required to pay any amount of interest or other fees or
charges that is in excess of the maximum permitted by
applicable law. Any payment in excess of such maximum shall
be refunded to Borrower or credited against principal, at the
option of Bank.
Accrual Method
Interest at the Rate set forth above, unless otherwise
indicated, will be calculated on the basis of the 365/360
method, which computes a daily amount of interest for a
hypothetical year of 360 days, then multiplies such amount by
the actual number of days elapsed in an interest calculation
period.
Rate Change Date
Any Rate based on a fluctuating index or base rate will
change, unless otherwise provided, each time and as of the
date that the index or base rate changes.
Payment Schedule
All payments received hereunder shall be applied first to the
payment of any expense or charges payable hereunder or under
any other documents executed in connection with this Note
("Loan Documents"), then to interest due and payable, with the
balance being applied to principal, or in such other order as
Bank shall determine at its option.
1. Commencing December 25, 1997, and on the same day of each
month thereafter through November 25, 2002, payments of
all accrued and unpaid interest shall be made until
maturity as set forth below.
2. The entire principal balance, together with all accrued
and unpaid interest shall be due and payable in full on
November 25, 2002.
Revolving Feature
Borrower may borrow, repay and reborrow hereunder at any
time, up to a maximum aggregate amount outstanding at any
one time equal to the principal amount of this Note;
provided, however, that Borrower is not in default under
any provision of this Note, any Loan Document, or any
other obligation of Borrower to Bank, and provided that
the borrowings hereunder do not exceed any borrowing base
or other limitations on borrowings by Borrower. Bank
shall have no liability for its refusal to advance funds
based upon its determination that any conditions of such
further advances have not been met. Bank records
of the amounts borrowed from time to time shall be conclusive
proof thereof.
Automatic Payment
Borrower has elected to authorize Bank to effect payment
of sums due under this Note by means of debiting
Borrower's account number
____________________________________. This authorization
shall not affect the obligation of Borrower to pay such
sums when due, without notice, if there are insufficient
funds in such account to make such payment in full on the
due date thereof, or if Bank fails to debit the account.
Borrower represents to Bank that the proceeds of this loan are
to be used primarily for business, commercial or agricultural
purposes. Borrower acknowledges having read and understood,
and agrees to be bound by all terms and conditions of this
Note, including the Additional Terms and Conditions set forth
in the Addendum attached hereto and made a part hereof, and
hereby executes this Note under seal.
BORROWER:
ELCOTEL, INC., a Delaware
corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and
Chief Financial Officer
(CORPORATE SEAL)
ELCOTEL DIRECT, INC., a
Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
(CORPORATE SEAL)
ELCOTEL HOSPITALITY SERVICES, INC.,
a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
(CORPORATE SEAL)
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
The foregoing instrument was acknowledged before me this
25th day of November, 1997, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice-President
and Chief Financial Officer of ELCOTEL, INC., a Delaware
corporation, on behalf of said corporation. He is personally
known to me and produced a Florida Drivers License as
identification and did not take an oath.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
*▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(NOTARIAL SEAL) *(Print Name of Notary Public)
Notary Public - State of Georgia
My commission expires June 4, 2000
Notary Public, DeKalb County, GA
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
The foregoing instrument was acknowledged before me this
25th day of November, 1997, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice-President
of ELCOTEL DIRECT, INC., a Delaware corporation, on behalf of
said corporation. He is personally known to me and produced
a Florida Drivers License as identification and did not take
an oath.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
*▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(NOTARIAL SEAL) *(Print Name of Notary Public)
Notary Public - State of Georgia
My commission expires June 4, 2000
Notary Public, DeKalb County, GA
STATE OF GEORGIA
COUNTY OF ▇▇▇▇▇▇
The foregoing instrument was acknowledged before me this
25th day of November, 1997, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice-President
of ELCOTEL HOSPITALITY SERVICES, INC., a Delaware corporation,
on behalf of said corporation. He is personally known to me
and produced a Florida Drivers License as identification and
did not take an oath.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
*▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(NOTARIAL SEAL) *(Print Name of Notary Public)
Notary Public - State of Georgia
My commission expires June 4, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
ADDENDUM
OF
ADDITIONAL TERMS AND CONDITIONS
-------------------------------
1. Waivers, Consents and Covenants. Borrower, any indorser,
or guarantor hereof or any other party hereto
(collectively "Obligors") and each of them jointly and
severally: (a) waive presentment, demand, notice of
demand, notice of intent to accelerate, and notice of
acceleration of maturity, protest, notice of protest,
notice of non-payment, notice of dishonor, and any other
notice required to be given under the law to any of
Obligors, in connection with the delivery, acceptance,
performance, default or enforcement of this Note, of any
indorsement or guaranty of this Note or of any Loan
Documents; (b) consent to any and all delays, extensions,
renewals or other modifications of this Note or the Loan
Documents, or waivers of any term hereof or of the Loan
Documents, or releases or discharge by Bank of any of
Obligors or release, substitution, or exchange of any
security for the payment hereof, or the failure to act on
the part of Bank or any indulgence shown by Bank, from
time to time and in one or more instances (without notice
to or further assent from any of Obligors) and agree that
no such action, failure to act or failure to exercise any
right or remedy on the part of Bank shall in any way
affect or impair the obligations of any Obligors or be
construed as a waiver by Bank of, or otherwise affect,
any of Bank's rights under this Note, under any
indorsement or guaranty of this Note or under any of the
Loan Documents; and (c) agree to pay, on demand, all
costs and expenses of collection of this Note or of any
indorsement or guaranty hereof and/or the enforcement of
Bank's rights with respect to, or the administration,
supervision, preservation, protection of, or realization
upon, any property securing payment hereof, including
without limitation, reasonable attorneys' fees, including
fees related to any trial, arbitration, bankruptcy,
appeal or other proceeding.
2. Indemnification. Obligors agree to promptly pay,
indemnify and hold Bank harmless from all state and
federal taxes of any kind and other liabilities with
respect to or resulting from advances made pursuant to
this Note; provided however this shall not apply to
income taxes, Federal, State or otherwise, of the Bank.
If this Note has a revolving feature and is secured by a
mortgage, Obligors expressly consent to the deduction of
any applicable taxes from each taxable advance extended
by Bank.
3. Prepayments. Prepayment may be made in whole or in part
at any time. All prepayments of principal shall be
applied in the inverse order of maturity, or in such
other order as Bank shall determine in its sole
discretion.
4. Events of Default. The following are events of default
hereunder: (a) the failure to make any payment due under
this Note within ten (10) days after the due date or the
failure to pay or perform any obligation, liability or
indebtedness of any Obligor to Bank, or to any affiliate
of Bank, whether under this Note or any other agreement,
note or instrument now or hereafter existing, as and when
due (whether upon demand, at maturity or by
acceleration); (b) the failure to pay or perform any
other obligation, liability or indebtedness of any of
Obligors whether to Bank or some other party, the
security for which constitutes an encumbrance on the
security for this Note; (c) death of any Obligor (if an
individual), or a proceeding being filed or commenced
against any Obligor for dissolution or liquidation, or
any Obligor voluntarily or involuntarily terminating or
dissolving or being terminated or dissolved; (d)
insolvency of, business failure of, the appointment of a
custodian, trustee, liquidator or receiver for or for any
other property of, or an assignment for the benefit of
creditors by, or the filing of a petition under
bankruptcy, insolvency or debtor's relief law or for any
adjustment of indebtedness, composition or extension by
or against any Obligor; (e) any lien or additional
security interest being placed upon any of the property
which is security for this Note; (f) acquisition at any
time or from time to time of title to the whole of or any
part of the property which is security for this Note by
any person, partnership, corporation or other entity; (g)
Bank determining that any representation or warranty made
by any Obligor in any Loan Documents or otherwise to Bank
is, or was, untrue or materially misleading; (h) failure
of any Obligor to timely deliver such financial
statements, including tax returns, and other statements
of condition or other information as Bank shall request
from time to time;(i) any default under any Loan
Documents; (j) entry of a judgment against any Obligor
which Bank deems to be of a material nature, in Bank's
sole discretion; (k) the seizure or forfeiture of, or the
issuance of any writ of possession, garnishment or
attachment, or any turnover order for any property of any
Obligor; (l) the determination by Bank that a material
adverse change has occurred in the financial condition of
any Obligor; or, (m) the failure to comply with any law
or regulation regulating the operation of Borrower's
business which has a material effect on Borrower's
business.
5. Remedies Upon Default. Whenever there is a default under
this Note, (a) the entire balance outstanding and all
other obligations of Obligor to Bank (however acquired or
evidenced) shall, at the option of Bank, become
immediately due and payable, and/or (b) to the extent
permitted by law, the Rate of interest on the unpaid
principal shall, at the option of Bank, be increased at
Bank's discretion up to the maximum rate allowed by law,
or if none, twenty-five percent (25%) per annum (the
"Default Rate"); and/or (c) to the extent permitted by
law, a delinquency charge may be imposed in an amount not
to exceed five percent (5%) of any payment in default for
more than fifteen (15) days. The provisions herein for
a Default Rate or a delinquency charge shall not be
deemed to extend the time for any payment hereunder or to
constitute a "grace period" giving the Obligors a right
to cure any default. At Bank's option, any accrued and
unpaid interest, fees or charges may, for purposes of
computing and accruing interest on a daily basis after
the due date of the Note or any installment thereof, be
deemed to be a part of the principal balance, and
interest shall accrue on a daily compounded basis after
such date at the rate provided in this Note until the
entire outstanding balance of principal and interest is
paid in full. Bank is hereby authorized at any time to
setoff and charge against any deposit accounts of any
Obligor, as well as any other property of such party at
or under the control of Bank, without notice or demand,
any and all obligations due hereunder.
6. Non-waiver. The failure at any time of Bank to exercise
any of its options or any other rights hereunder shall
not constitute a waiver thereof, nor shall it be a bar to
the exercise of any of its options or rights at a later
date. All rights and remedies of Bank shall be
cumulative and may be pursued singly, successively or
together, at the option of Bank. The acceptance by Bank
of any partial payment shall not constitute a waiver of
any default or of any of Bank's rights under this Note.
No waiver of any of its rights hereunder, and no
modification or amendment of this Note, shall be deemed
to be made by Bank unless the same shall be in writing,
duly signed on behalf of Bank; and each such wavier, if
any, shall apply only with respect to the specific
instance involved, and shall in no way impair the rights
of Bank or the obligations of Obligor to Bank in any
other respect at any other time.
7. Applicable Law. This Note shall be construed under the
internal laws and judicial decisions of the State of
Florida, and the laws of the United States as the same
may be applicable.
8. Partial Invalidity. The unenforceability or invalidity
of any provision of this Note shall not affect the
enforceability or the validity of any other provision
herein and the invalidity or unenforceability of any
provision of this Note or of the Loan Documents to any
person or circumstance shall not affect the
enforceability or validity of such provision as it may
apply to other persons or circumstances.
9. Jurisdiction and Venue. In any litigation in connection
with or to enforce this Note or any indorsement or
guaranty of this Note or any Loan Documents, Obligors,
and each of them, irrevocably consent to and confer
personal jurisdiction on the courts of the State of
Florida or the United States courts located within the
State of Florida, and expressly waive any objections as
to venue in any such courts, and agree that service of
process may be made on Obligors by mailing a copy of the
summons and complaint by registered or certified mail,
return receipt requested, to their respective addresses.
Nothing contained herein shall, however, prevent Bank
from bringing any action or exercising any rights within
any other state or jurisdiction or from obtaining
personal jurisdiction by any other means available by
applicable law.
10. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE
ARISING OUT OF OR RELATING TO THIS NOTE OR ANY RELATED
NOTES OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL
ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE
STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE
ARBITRATION OF COMMERCIAL DISPUTES OR JUDICIAL
ARBITRATION AND MEDIATION SERVICES, INC. (J.A.M.S.) AND
THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT
UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THE NOTICE MAY BRING
AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,
TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO
WHICH THIS NOTE APPLIES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN THE CITY OF BRADENTON, FLORIDA AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS
UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION
WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED
WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION;
FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH
HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATIONS OR REPOSE AND ANY
WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY
THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C.
PARAGRAPH 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III)
LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF
HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
TO FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR
ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT
OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP
RIGHTS, FORECLOSURE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONALLY OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS NOTE. NEITHER THE EXERCISE OF SELF HELP
REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION
FOR FORECLOSURE OR PROVISIONALLY OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO
SUCH REMEDIES.
11. Binding Effect. This Note shall be binding upon
and inure to the benefit of Borrower, Obligors and
Bank and their respective successors, assigns,
heirs and personal representatives; provided,
however, that no obligations of the Borrower or the
Obligor hereunder can be assigned without prior
written consent of Bank.
12. NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY
NOTE AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
BORROWER:
ELCOTEL, INC., a Delaware
corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and
Chief Financial Officer
(CORPORATE SEAL)
ELCOTEL DIRECT, INC., a Delaware
corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
(CORPORATE SEAL)
ELCOTEL HOSPITALITY SERVICES,
INC., a Delaware corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
(CORPORATE SEAL)
