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TERM NOTE NON-REVOLVING LINE OF CREDIT

 

December 1, 2017

 

$800,000.00 Albany, New York

 

For value received, the undersigned Plastic Printing Professionals, Inc., a New
York corporation, with an address of 28 East Main Street, Suite 1525, Rochester,
New York 14614 (the “Borrower”), promises to pay to the order of Citizens Bank,
N.A., a national banking association with an address of 833 Broadway, Albany,
New York 12207 (together with its successors and assigns, the “Bank”), the
principal amount of Eight Hundred Thousand Dollars and Zero Cents ($800,000.00),
or, if less, such amount as may be the aggregate unpaid principal amount of all
loans or advances made by the Bank to the Borrower pursuant hereto, on or before
December 1, 2025 (the “Maturity Date”), as set forth below, together with
interest from the date hereof on the unpaid principal balance from time to time
outstanding until paid in full for any Interest Period (as hereinafter defined).
Until the Conversion Date (as hereinafter defined), the aggregate principal
balance outstanding shall bear interest thereon at a per annum rate equal to Two
Percent (2.00%) above the LIBOR Advantage Rate (as hereinafter defined), during
each LA Interest Period (as hereinafter defined). Effective on the Conversion
Date, the interest rate payable on the aggregate principal balance outstanding
shall be adjusted to a fixed rate (the “Fixed Rate”) equal to Two Percent
(2.00%) above the Bank’s Cost of Funds on the Conversion Date as determined by
the Bank in its sole discretion.

 

This Note evidences a line of credit for the purpose of financing the
acquisition of equipment by the Borrower. Advances shall be limited to a maximum
of 100% of the invoice price of equipment, less delivery and installation costs
acceptable to the Bank in its sole discretion, based upon invoices or other
evidence acceptable to the Bank. Advances may be made from time to time until
December 1, 2018 (the “Conversion Date”). Within the limits of time and amount
set forth above and subject to the terms and conditions set forth herein, and in
the other loan and security documents executed in connection herewith.
Undersigned may borrow, one or more advances hereunder provided, however, that
amounts repaid may not be reborrowed hereunder.

 

LA Interest Period means with respect to any LIBOR Advantage Loan, the period
commencing on (and including) the date of this Note (the “Start Date”) and
ending on (but excluding) the numerically corresponding date one month later,
and thereafter each one month period ending on the day of such month that
numerically corresponds to the Start Date. If an LA Interest Period is to end in
a month for which there is no day which numerically corresponds to the Start
Date, the LA Interest Period will end on the last day of such month.

 

Notwithstanding the date of commencement of any LA Interest Period, interest
shall only begin to accrue as of the date the initial LIBOR Advantage Loan is
made hereunder.

 

“LIBOR Advantage Rate” means, relative to any LA Interest Period, the offered
rate for deposits of U.S. Dollars for a term coextensive with the designated LA
Interest Period, reset daily, which the ICE Benchmark Administration (or any
successor administrator of LIBOR rates) fixes as its LIBOR rate as of 11:00 a.m.
London time for delivery in two London Banking Days. If such day is not a London
Banking Day, the LIBOR Advantage Rate shall be determined on the next preceding
day which is a London Banking Day. If for any reason the Bank cannot determine
such offered rate fixed by the then current administrator of LIBOR rates, the
Bank may, in its sole but reasonable discretion, use an alternative method to
select a rate calculated by the Bank to reflect its cost of funds. “London
Banking Day” means any day on which dealings in US dollar deposits are
transacted in the London interbank market.

 

 

 

 

“Cost of Funds Rate” means the rate per annum from time to time determined by
the Bank, in its sole discretion, as the Bank’s cost of funds rate and made
available by the Bank at its main office or, in the discretion of the Bank, the
base, reference or other rate then designated by the Bank for general commercial
loan reference purposes, it being understood that such rate is a reference rate,
not necessarily the lowest, established from time to time, which serves as the
basis upon which effective interest rates are calculated for loans making
reference thereto.

 

Prior to the Conversion Date, interest on the outstanding principal balance
shall be due and payable in arrears monthly commencing the month following the
date of the first advance on the _____ of each month. After the Conversion Date,
each advance shall be repaid in equal installments comprised of principal and
interest (calculated by the Bank in the Bank's sole discretion at the applicable
rate) based upon up to a 7 year amortization period for New Equipment and up to
a 5 year amortization period for Used Equipment, as determined by the Bank in
its sole discretion. Commencing on the _____ day of the month immediately
following the Conversion Date and continuing on the same day of each month
thereafter to and including the month immediately preceding the scheduled date
of the last such payment and one final payment equal to the aggregate
outstanding balance of such advance and all interest accrued thereon shall be
due and payable and such Advance shall mature on the earlier of the scheduled
date of the last such payment and the Maturity Date without further notice or
demand.

 

This Note is secured by all collateral granted to the Bank by the Borrower or
any endorser or guarantor hereof or by any other party and shall be secured by
any additional collateral hereafter granted to the Bank by the Borrower or any
endorser or guarantor hereof or by any other party.

 

Principal and interest shall be payable at the Bank’s main office or at such
other place as the Bank may designate in writing in immediately available funds
in lawful money of the United States of America without set-off, deduction or
counterclaim. Interest shall be calculated on the basis of actual number of days
elapsed and a 360-day year.

 

Each Advance may be prepaid in whole or in part upon thirty (30) days prior
written notice to the Bank. In the event of any prepayment of such Advance after
the Conversion Date, whether by voluntary prepayment, acceleration or otherwise,
the Borrower shall, at the option of the Bank, pay a “fixed rate prepayment
charge” equal to the product of: (a) the principal amount prepaid and (b) the
percentage set forth in the table below for any prepayment made during the
indicated period. “Conversion Year” shall mean each one year period commencing
on the Conversion Date or on any anniversary of the Conversion Date.

 

Period Percentage Conversion Year 1 5% Conversion Year 2 4% Conversion Year 3 3%
Conversion Year 4 2% Conversion Year 5 1% Conversion Year 6 1% Conversion Year 7
1%

 

After the last period indicated in the above table this Note may be prepaid in
whole or in part without any prepayment charge.

 

2

 

 

At the option of the Bank, this Note shall become immediately due and payable
without notice or demand upon the occurrence at any time of any of the following
events of default (each, an “Event of Default”): (1) default of any liability,
obligation, covenant or undertaking of the Borrower, any endorser or any
guarantor hereof to the Bank, hereunder or otherwise, including, without
limitation, failure to pay in full and when due any installment of principal or
interest or default of the Borrower, any endorser or any guarantor hereof under
any other loan document delivered by the Borrower, any endorser or any
guarantor, or in connection with the loan evidenced by this Note or any other
agreement by the Borrower, any endorser or any guarantor with the Bank; (2)
failure of the Borrower, any endorser or any guarantor hereof to maintain
aggregate collateral security value satisfactory to the Bank; (3) default of any
material liability, obligation or undertaking of the Borrower, any endorser or
any guarantor hereof to any other party; (4) if any statement, representation or
warranty heretofore, now or hereafter made by the Borrower, any endorser or any
guarantor hereof in connection with the loan evidenced by this Note or in any
supporting financial statement of the Borrower, any endorser or any guarantor
hereof shall be determined by the Bank to have been false or misleading in any
material respect when made; (5) if the Borrower, any endorser or any guarantor
hereof is a corporation, trust, partnership or limited liability company, the
liquidation, termination or dissolution of any such organization, or the merger
or consolidation of such organization into another entity, or its ceasing to
carry on actively its present business or the appointment of a receiver for its
property; (6) the death of the Borrower, any endorser or any guarantor hereof
and, if the Borrower, any endorser or any guarantor hereof is a partnership or
limited liability company, the death of any partner or member; (7) the
institution by or against the Borrower, any endorser or any guarantor hereof of
any proceedings under the Bankruptcy Code 11 USC §101 et seq. or any other law
in which the Borrower, any endorser or any guarantor hereof is alleged to be
insolvent or unable to pay its debts as they mature, or the making by the
Borrower, any endorser or any guarantor hereof of an assignment for the benefit
of creditors or the granting by the Borrower, any endorser or any guarantor
hereof of a trust mortgage for the benefit of creditors; (8) the service upon
the Bank of a writ in which the Bank is named as trustee of the Borrower, any
endorser or any guarantor hereof; (9) a judgment or judgments for the payment of
money shall be rendered against the Borrower, any endorser or any guarantor
hereof, and any such judgment shall remain unsatisfied and in effect for any
period of thirty (30) consecutive days without a stay of execution; (10) any
levy, lien (including mechanics lien) except as permitted under any of the other
loan documents between the Bank and the Borrower, seizure, attachment, execution
or similar process shall be issued or levied on any of the property of the
Borrower, any endorser or any guarantor hereof; (11) the termination or
revocation of any guaranty hereof; or (12) the occurrence of such a change in
the condition or affairs (financial or otherwise) of the Borrower, any endorser
or any guarantor hereof, or the occurrence of any other event or circumstance,
such that the Bank, in its sole discretion, deems that it is insecure or that
the prospects for timely or full payment or performance of any obligation of the
Borrower, any endorser or any guarantor hereof to the Bank has been or may be
impaired.

 

Any payments received by the Bank on account of this Note shall, at the Bank’s
option, be applied first, to accrued and unpaid interest; second, to the unpaid
principal balance hereof; third to any costs, expenses or charges then owed to
the Bank by the Borrower; and the balance to escrows, if any. Notwithstanding
the foregoing, any payments received after the occurrence and during the
continuance of an Event of Default shall be applied in such manner as the Bank
may determine. The Borrower hereby authorizes the Bank to charge any deposit
account which the Borrower may maintain with the Bank for any payment required
hereunder without prior notice to the Borrower.

 

If pursuant to the terms of this Note, the Borrower is at any time obligated to
pay interest on the principal balance at a rate in excess of the maximum
interest rate permitted by applicable law for the loan evidenced by this Note,
the applicable interest rate shall be immediately reduced to such maximum rate
and all previous payments in excess of the maximum rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder.

 

The Borrower represents to the Bank that the proceeds of this Note will not be
used for personal, family or household purposes or for the purpose of purchasing
or carrying margin stock or margin securities within the meaning of Regulations
U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.

 

The Borrower and each endorser and guarantor hereof grant to the Bank a
continuing lien on and security interest in any and all deposits or other sums
at any time credited by or due from the Bank or any Bank Affiliate (as
hereinafter defined) to the Borrower and/or each endorser or guarantor hereof
and any cash, securities, instruments or other property of the Borrower and each
endorser and guarantor hereof in the possession of the Bank or any Bank
Affiliate, whether for safekeeping or otherwise, or in transit to or from the
Bank or any Bank Affiliate (regardless of the reason the Bank or Bank Affiliate
had received the same or whether the Bank or Bank Affiliate has conditionally
released the same) as security for the full and punctual payment and performance
of all of the liabilities and obligations of the Borrower and/or any endorser or
guarantor hereof to the Bank or any Bank Affiliate and such deposits and other
sums may be applied or set off against such liabilities and obligations of the
Borrower or any endorser or guarantor hereof to the Bank or any Bank Affiliate
at any time, whether or not such are then due, whether or not demand has been
made and whether or not other collateral is then available to the Bank or any
Bank Affiliate.

 

3

 

 

No delay or omission on the part of the Bank in exercising any right hereunder
shall operate as a waiver of such right or of any other right of the Bank, nor
shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion. The Borrower and
every endorser or guarantor of this Note, regardless of the time, order or place
of signing, waive presentment, demand, protest, notice of intent to accelerate,
notice of acceleration and all other notices of every kind in connection with
the delivery, acceptance, performance or enforcement of this Note and assent to
any extension or postponement of the time of payment or any other indulgence, to
any substitution, exchange or release of collateral, and to the addition or
release of any other party or person primarily or secondarily liable and waives
all recourse to suretyship and guarantor defenses generally, including any
defense based on impairment of collateral. To the maximum extent permitted by
law, the Borrower and each endorser and guarantor of this Note waive and
terminate any homestead rights and/or exemptions respecting any premises under
the provisions of any applicable homestead laws, including without limitation,
Section 5206 of the Civil Practice Law and Rules of New York.

 

The Borrower and each endorser and guarantor of this Note shall indemnify,
defend and hold the Bank and the Bank Affiliates and their directors, officers,
employees, agents and attorneys (each an “Indemnitee”) harmless against any
claim brought or threatened against any Indemnitee by the Borrower, by any
endorser or guarantor, or by any other person (as well as from attorneys’
reasonable fees and expenses in connection therewith) on account of the Bank’s
relationship with the Borrower or any endorser or guarantor hereof (each of
which may be defended, compromised, settled or pursued by the Bank with counsel
of the Bank’s selection, but at the expense of the Borrower and any endorser
and/or guarantor), except for any claim arising out of the gross negligence or
willful misconduct of the Bank.

 

The Borrower and each endorser and guarantor of this Note agree to pay, upon
demand, costs of collection of all amounts under this Note including, without
limitation, principal and interest, or in connection with the enforcement of, or
realization on, any security for this Note, including, without limitation, to
the extent permitted by applicable law, reasonable attorneys’ fees and expenses.
Upon the occurrence and during the continuance of an Event of Default, interest
shall accrue at a rate per annum equal to the aggregate of 5.0% plus the rate
provided for herein. If any payment due under this Note is unpaid for 10 days or
more, the Borrower shall pay, in addition to any other sums due under this Note
(and without limiting the Bank’s other remedies on account thereof), a late
charge equal to the greater of $35.00 or 5.0% of such unpaid amount (which
amount shall be subject to and limited so as to not be in violation of the
provisions of Section 254-b of New York Real Property Law, if applicable).

 

This Note shall be binding upon the Borrower and each endorser and guarantor
hereof and upon their respective heirs, successors, assigns and legal
representatives, and shall inure to the benefit of the Bank and its successors,
endorsees and assigns.

 

The liabilities of the Borrower and each Borrower, if more than one, and any
endorser or guarantor of this Note are joint and several; provided, however, the
release by the Bank of the Borrower or any one or more endorsers or guarantors
shall not release any other person obligated on account of this Note. Any and
all present and future debts of the Borrower to any endorser or guarantor of
this Note are subordinated to the full payment and performance of all present
and future debts and obligations of the Borrower to the Bank. Each reference in
this Note to the Borrower and each Borrower, if more than one, and endorser or
guarantor of this Note, is to such person individually and also to all such
persons jointly. No person obligated on account of this Note may seek
contribution from any other person also obligated, unless and until all
liabilities, obligations and indebtedness to the Bank of the person from whom
contribution is sought have been irrevocably satisfied in full. The release or
compromise by the Bank of any collateral shall not release any person obligated
on account of this Note.

 

4

 

 

The Borrower and each endorser and guarantor hereof each authorizes the Bank to
complete this Note if delivered incomplete in any respect. A photographic or
other reproduction of this Note may be made by the Bank, and any such
reproduction shall be admissible in evidence with the same effect as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence.

 

The Borrower will from time to time execute and deliver to the Bank such
documents, and take or cause to be taken, all such other further action, as the
Bank may request in order to effect and confirm or vest more securely in the
Bank all rights contemplated by this Note or any other loan documents related
thereto (including, without limitation, to correct clerical errors) or to vest
more fully in or assure to the Bank the security interest in any collateral
securing this Note or to comply with applicable statute or law.

 

This Note shall be governed by federal law applicable to the Bank and, to the
extent not preempted by federal law, the laws of the State of New York.

 

Any notices under or pursuant to this Note shall be deemed duly received and
effective if delivered in hand to any officer or agent of the Borrower or Bank,
or if mailed by registered or certified mail, return receipt requested,
addressed to the Borrower or Bank at the address set forth in this Note or as
any party may from time to time designate by written notice to the other party.

 

The term “Bank Affiliate” as used in this Note shall mean any “Affiliate” of the
Bank or any lender acting as a participant under any loan arrangement between
the Bank and the Borrower(s). The term “Affiliate” shall mean with respect to
any person, (a) any person which, directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such person, or (b) any person who is a director or officer (i) of such person,
(ii) of any subsidiary of such person, or (iii) any person described in clause
(a) above. For purposes of this definition, control of a person shall mean the
power, direct or indirect, (x) to vote 5% or more of the Capital Stock having
ordinary voting power for the election of directors (or comparable equivalent)
of such person, or (y) to direct or cause the direction of the management and
policies of such person whether by contract or otherwise. Control may be by
ownership, contract, or otherwise.

 

The Borrower and each endorser and guarantor of this Note each irrevocably
submits to the nonexclusive jurisdiction of any Federal or state court sitting
in New York, over any suit, action or proceeding arising out of or relating to
this Note. Each of the Borrower and each endorser and guarantor irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
objection it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any claim that the same
has been brought in an inconvenient forum. Each of the Borrower and each
endorser and guarantor hereby consents to any and all process which may be
served in any such suit, action or proceeding, (i) by mailing a copy thereof by
registered and certified mail, postage prepaid, return receipt requested, to the
Borrower’s, endorser’s or guarantor’s address shown below or as notified to the
Bank and (ii) by serving the same upon the Borrower(s), endorser(s) or
guarantor(s) in any other manner otherwise permitted by law, and agrees that
such service shall in every respect be deemed effective service upon the
Borrower or such endorser or guarantor.

 

5

 

 

THE BORROWER, EACH ENDORSER AND GUARANTOR AND THE BANK EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, AND AFTER AN OPPORTUNITY TO CONSULT WITH LEGAL
COUNSEL, (A) WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING IN CONNECTION WITH THIS NOTE, ANY OF THE OBLIGATIONS OF THE BORROWER,
EACH ENDORSER AND GUARANTOR TO THE BANK, AND ALL MATTERS CONTEMPLATED HEREBY AND
DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND (B) AGREES NOT TO SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CAN NOT
BE, OR HAS NOT BEEN, WAIVED. THE BORROWER, EACH ENDORSER AND GUARANTOR AND THE
BANK EACH CERTIFIES THAT NEITHER THE BANK NOR ANY OF ITS REPRESENTATIVES, AGENTS
OR COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT IN
THE EVENT OF ANY SUCH PROCEEDING SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL
BY JURY.

 

Executed as of December 1, 2017.

 

  Borrower:       Plastic Printing Professionals, Inc.       By:       Philip
Jones, Treasurer       28 East Main Street, Suite 1525
Rochester, New York   14614

 

6