Exhibit 10.2

 

Loan No. 33453

PROMISSORY NOTE

(Term Loan)

 

$18,975,000.00         September 6, 2016

 

 

FOR VALUE RECEIVED, UTSI FINANCE, INC., a Michigan corporation ("Borrower")
having the address of 12755 E. Nine Mile Road, Warren, Michigan, 48089,
promise(s) to pay to the order of FLAGSTAR BANK, F.S.B., a federally chartered
savings bank (together with its successors and assigns, “Bank”), or to order, on
or before September 5, 2026 (“Term Loan Maturity Date”), the principal amount
not to exceed Eighteen Million Nine Hundred Seventy Five Thousand and No/100
Dollars ($18,975,000.00), together with interest on the unpaid principal amount
hereof until paid at the rates per annum set forth below (“Term Loan”).

The Loan Agreement

This Promissory Note (Term Loan) (this “Note”) has been executed pursuant to
that certain Loan and Financing Agreement of even date between Bank and the
Borrower (as amended, restated or otherwise superseded from time to time, the
“Loan Agreement”).  Capitalized terms used but not otherwise defined in this
Note have the meanings given them in the Loan Agreement.  This Note is issued
pursuant to the Loan Agreement.  This Note is secured by a Commercial Mortgage
against property commonly known as 28925 and 29129 Ecorse Road, Romulus,
Michigan.

Interest

While no Event of Default exists, amounts outstanding under this Note will
(except to the extent specifically provided to the contrary) bear interest at a
rate per annum equal to the sum of (a) LIBOR plus (b) two and one-quarter
percent (2.25%).

The following terms shall have the respective meanings attributed to them:

“Base Rate” means, as determined for any day, a variable rate of interest equal
to one percent (1%) per annum less than the greater of (a) the Federal Funds
Rate plus 1/2 of 1% and (b) the Prime Rate for such day.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day.

“Interest Period” means (i) the period beginning the day principal is first
advanced under this Note to, but excluding, the first Payment Date, and
(ii) each subsequent period commencing on (and including) the last day of the
preceding Interest Period and ending on (but excluding) the next Payment Date;
provided that in no event shall any Interest Period extend beyond the Term Loan
Maturity Date.

“LIBOR” means, with respect to any Interest Period, the interest rate per annum
determined by Bank by dividing (i) the rate that appears as the one (1) month
ICE Benchmark Administration LIBOR Rate for United States Dollar deposits (as
quoted by Bloomberg Finance L.P.) offered by leading banks in the London
interbank deposit market at approximately 11:00 a.m. London time, two (2)
Business Days prior to the first day of such Interest Period (or, if for any
reason, such source for rate information no

 

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longer exists, a comparable replacement rate determined by Bank at such time),
by (ii) a number equal to 1.00 minus the LIBOR Reserve Percentage.

“LIBOR Reserve Percentage” means the maximum effective percentage in effect on
such day as prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for determining the reserve requirements (including, without
limitation, supplemental, marginal, and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

“Payment Date” means the 1st day of each month.

“Prime Rate” means, for any day, the variable per annum rate of interest so
designated from time to time by Bank as its “prime rate.”  The Borrower
acknowledges that the Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate being charged to any customer of Bank and that
changes in the rate of interest applicable to this Note resulting from changes
in the Prime Rate shall take place immediately without notice or demand of any
kind.

The following provisions shall also apply to the principal from time to time
evidenced by this Note:

(a)Except as specifically provided to the contrary in this Note, the entire
principal balance shall be carried in consecutive Interest Periods, each of
one-month duration and commencing on the expiration of each preceding Interest
Period;

(b)LIBOR may be deemed by Bank (in Bank's sole reasonable discretion) to be
unavailable if a Default or Event of Default occurs or if Bank reasonably
determines that (i) no adequate basis exists for determining LIBOR, (ii) adverse
or unusual conditions in or changes in applicable law or the London interbank
eurodollar market make it illegal or, in the reasonable judgment of Bank,
impossible to fund loans at LIBOR or make LIBOR unreflective of the actual costs
of funds to Bank, or (iii) it has become unlawful for Bank to charge interest on
Loans by reference to LIBOR; and

(c)If LIBOR is deemed by Bank to be unavailable, then Bank shall so notify the
Borrower, and all LIBOR Loans (as defined below) shall immediately and
automatically begin bearing interest at the Base Rate (and shall continue to do
so until LIBOR is reasonably deemed available by Bank).

Interest Computations

Interest due with respect to this Note shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed.  If the due date for
any payment required under this Note is extended by operation of law, interest
shall be payable for such extended time.  If any payment required under this
Note is due on a day that is not a Business Day, such payment may be made on the
next succeeding Business Day (with interest continuing to accrue until paid),
unless such extension would carry such date for payment into the next month, in
which event such payment shall be made on the preceding Business Day.

Principal and Interest Payments

The Borrower shall repay the outstanding principal balance of this Note in
consecutive monthly installments of principal each in the amount of One Hundred
Fifty Eight Thousand One Hundred Twenty Five and 00/100 Dollars ($158,125.00),
with such installments due on each Payment Date.  Together with each installment
of principal, Borrower shall also pay all accrued interest.  On the Term Loan
Maturity

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Date, the Borrower shall repay all Obligations then outstanding with respect to
the Term Loan, including, without limitation, the outstanding principal balance
of this Note, all interest accrued thereon, prepayment fees, charges and
premiums, and all costs and expenses payable to Bank.

The Borrower may prepay this Note in whole or in part at any time, without
premium or additional charge, except as set forth in this Note.  Amounts so
prepaid may not be borrowed or reborrowed, and the Term Loan shall be
permanently reduced by the amount so prepaid.

Prepayment; Yield Maintenance and Breakage

Except for any obligations under a Swap, if any, so long as interest is accruing
at a LIBOR-based rate (“LIBOR Loan”), the Borrower may prepay only upon at least
three (3) Business Days’ prior written notice to Bank (which notice shall be
irrevocable), and the Borrower shall pay the applicable Yield Maintenance Fee
(if any) to Bank and any actual breakage costs incurred by Bank, upon request of
Bank, in connection with the payment of a LIBOR Loan on a date other than the
last day of the Interest Period for such LIBOR Loan.  As used herein, “Yield
Maintenance Fee” means an amount computed as follows in connection with
prepayment of LIBOR Loans: the current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the last day of the Interest Period applicable
to the LIBOR Loan as to which the prepayment is made shall be subtracted from
the LIBOR in effect at the time of prepayment.  If the result is zero or a
negative number, there shall be no Yield Maintenance Fee.  If the result is a
positive number, then the resulting percentage shall be multiplied by the amount
of the principal balance being prepaid.    The resulting amount shall be divided
by 360 and multiplied by the number of days remaining in the applicable Interest
Period.  The resulting amount shall be the Yield Maintenance Fee, which shall be
due and payable upon the prepayment of a LIBOR Loan.  If by reason of an Event
of Default, Bank elects to declare the Obligations under this Note to be
immediately due and payable, then a Yield Maintenance Fee with respect to then
outstanding LIBOR Loans shall be due and payable.  The Borrower acknowledges
that Bank will incur substantial additional costs and expenses, including loss
of yield and anticipated profitability, in the event of prepayment of a LIBOR
Loan and that the Yield Maintenance Fee compensates Bank for such costs and
expenses and is bargained for consideration and not a penalty.

Acceleration; Default Interest and Late Charges

Upon the occurrence of an Event of Default, (a) Bank may declare the aggregate
unpaid balance of principal of this Note, plus all accrued interest and all
other unpaid Obligations, to be immediately due and payable, and (b) all
Obligations evidenced by this Note shall bear interest at the Default Rate.  In
addition, if any payment required under this Note is not paid in full within ten
days after its due date, the Borrower shall pay to Bank, on demand, a late
payment charge equal to three percent (3%) of the overdue payment.  The
provisions of this Section, and Borrower’s liability and responsibility under
this Note and with respect to other Obligations, and Bank’s rights with respect
thereto, are expressly subject to the provisions of Section 15 of the Loan
Agreement.

Application of Payments

Any payments received by Bank with respect to this Note prior to the occurrence
of an Event of Default shall be applied first to any costs, expenses, fees, or
prepayment premiums due to Bank, second to any accrued interest, and third to
the unpaid principal.  Any payments received after the occurrence of an Event of
Default shall be applied to the Obligations in such a manner as Bank shall
determine.

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Place for Payments

All payments under this Note shall be made at the office of Bank at the address
set forth on the signature page of this Note (or at such other place as Bank may
designate from time to time in writing) in lawful money of the United States of
America, in federal or other immediately available funds.  

Waivers by the Borrower

The Borrower waives presentment, demand, notice of dishonor, protest, and all
other demands and notices (except as provided in or required by the Loan
Agreement or other Loan Documents) in connection with the delivery, acceptance,
performance, and enforcement of this Note.  The Borrower’s liability under this
Note shall remain unimpaired, notwithstanding (i) any extension of the time for
payment or other indulgence granted by Bank, (ii) the release of all or any part
of the security granted to Bank, or (iii) the liability (or release of
liability) of any party that may assume or otherwise be liable for the payment
of the indebtedness evidenced by this Note or the performance of the Obligations
of the Borrower under any of the other Loan Documents.

Business Purposes

The Borrower represents to Bank that the proceeds of this Note will be used
solely for business purposes and shall not be used for personal, family, or
household purposes.

Note as Loan Document

This Note constitutes a Loan Document as defined in the Loan Agreement and shall
be governed by the provisions of the Loan Agreement pertaining to setoff,
governing law, and jurisdiction and forum.

WAIVER OF JURY TRIAL, SERVICE OF PROCESS AND DAMAGES

The Borrower and, by its acceptance of this Note, Bank each knowingly,
voluntarily, and intentionally waives the right to a trial by jury with respect
to any claim arising out of, under, or in connection with this Note or any
course of conduct, course of dealings, statements (whether oral or written), or
actions of the Borrower or Bank, including, without limitation, Bank's
administration of the Term Loan or enforcement of this Note or the other Loan
Documents.  The Borrower agrees it shall not seek to consolidate any such action
with any other action in which a jury cannot be waived or has not been waived.  

In any action or proceedings arising out of, or relating to, this Note, the
Borrower absolutely and irrevocably waives personal service of any summons,
complaint, declaration, or other process and absolutely and irrevocably agrees
that service of process may be made in the manner (and to the address for
notices to the Borrower) specified in the Loan Agreement.  

The Borrower certifies that no representative, agent, or attorney of Bank has
represented, expressly or otherwise, that Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and agreements, each of which
constitutes a material inducement for Bank to accept this Note and to make the
Term Loan.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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IN WITNESS WHEREOF, the Borrower has executed this Note as of the date first
above written.

BORROWER:

 

UTSI FINANCE, INC., a Michigan corporation

 

By:  /s/ Violeta V. Golematis

            Violeta V. Golematis

Its:  Treasurer

 

Address for Payments:

 

Flagstar Bank, FSB

Commercial Loan Operations

5151 Corporate Drive

Mail Stop E-203-3

Troy, Michigan 48098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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