BYRNA TECHNOLOGIES INC. 8-K


Exhibit 4.2


 





Execution Version


   


SECURED
REVOLVING LINE OF CREDIT NOTE


 








	$5,000,000.00 	January
    19, 2021
	Needham, Massachusetts



 


FOR
VALUE RECEIVED, the undersigned, BYRNA TECHNOLOGIES INC., a Delaware corporation (the "Borrower"), promises
to pay to NEEDHAM BANK, a Massachusetts co-operative bank (the "Lender"), or its order, at the office
of the Lender located at 1063 Great Plain Avenue, Needham, Massachusetts 02492, or such other place as the Lender shall designate,
the maximum principal sum of FIVE MILLION and 00/100 DOLLARS ($5,000,000.00) (or if less, the aggregate unpaid principal amount
of all loans or advances made by the Lender to the Borrower pursuant to this Secured Revolving Line of Credit Note (as it may
be amended, restated, supplemented or otherwise modified from time to time, this "Note") and that certain Commercial
Loan and Security Agreement of even date hereof entered into by and between the Lender and the Borrower (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "Loan Agreement")), together with interest
on the unpaid principal balance hereof at a fluctuating per annum interest rate equal to sum of the Prime Rate (as defined herein)
plus fifty (50) basis points (0.50%). As used herein, the term "Prime Rate" shall mean the
Prime Rate as published in the “Money Rates” section of The Wall Street Journal, provided, however,
if such rate is, at any time during the term of this Note, no longer so published by The Wall Street Journal, upon
written notice to the Borrower, the Lender shall designate a comparable reference rate which shall be deemed the "Prime Rate"
hereunder. The effective interest rate under this Note shall be automatically changed contemporaneously with each change
in the Prime Rate, provided, however, that the Lender has no obligation to notify the Borrower of any changes in the effective
rate of interest under this Note. Notwithstanding anything contained herein to the contrary, at no point in time during the term
of this Note shall the effective interest rate under this Note be less than four percent (4.00%) per annum.


 


Commencing
on March 1, 2021 and continuing thereafter on the same day of each succeeding month during the term of this Note (the first (1st)
day of each calendar month is hereinafter referred to as a "Payment Date"), the Borrower shall make consecutive
monthly payments of any and all accrued interest only, in arrears.


 


Interest
on the outstanding principal balance of this Note shall be calculated on the basis of actual days elapsed and a 360-day year.
If not sooner repaid or accelerated pursuant to the terms of the Loan Agreement, the entire outstanding principal balance under
this Note, together with all accrued and outstanding interest thereon and any other fees and charges then due, shall be due and
payable in full on January 19, 2024 (the "Maturity Date"). All Payment Dates are subject to the Following Business
Day Convention (as defined below). This Note constitutes the "Revolving Note" referenced in the Loan Agreement and the
loan evidenced by this Note constitutes the "Revolving Loan" referenced in the Loan Agreement. All other capitalized
terms not defined herein shall be given the same meaning as set forth in the Loan Agreement.


 






     


     


    

 


The
"Following Business Day Convention" means the convention for adjusting any relevant date that would otherwise
fall on a day that is not a Business Day so that the date will be the first following day that is a Business Day. "Business
Day" is a day which is neither a Saturday nor a Sunday nor a legal holiday on which commercial banks are authorized to
be closed in Boston, Massachusetts.


 


If
at any time the aggregate outstanding principal balance under this Note exceeds Five Million and No/100 Dollars ($5,000,000.00),
the Borrower shall immediately pay to the Lender an amount equal to such excess.


 


The
Borrower may prepay, in whole or in part, the outstanding principal balance of this Note without premium or penalty at any time.
The line of credit evidenced by this Note is a revolving facility. Principal amounts repaid shall be available to be re-advanced
to the Borrower, subject to the terms and conditions of the Loan Agreement.


 


The
occurrence of any of the following events (each an "Event of Default") shall constitute an Event of Default hereunder:
(i) the failure to pay in full any payment of principal due hereunder when such payment is due or the failure to pay any interest
due within three (3) Business Days of when such payment is due; or (ii) the occurrence and continuance of an Event of Default
under the Loan Agreement. Upon the occurrence and during the continuance of an Event of Default, in addition to any rights and
remedies afforded the Lender under the Loan Agreement, at the option of the Lender, the entire outstanding principal balance under
this Note, together with all accrued and outstanding interest thereon and any other fees and charges then due, shall become immediately
due and payable in full without notice or demand.


 


The
Borrower’s obligations under this Note are secured by, inter alia, the first priority (subject to any Permitted Liens)
security interest in the Collateral (as defined in the Loan Agreement) granted by the Borrower in favor of the Lender pursuant
to the terms of the Loan Agreement.


 


If
any payment of principal or interest hereunder is not paid in full when due and such default constitutes an Event of Default which
is continuing, interest on such unpaid balance may, at the option of the Lender, thereafter accrue and be payable at a per annum
rate equal to four percent (4.00%) greater than the rate of interest otherwise applicable to such balance (the "Default
Rate"). In no event, however, shall advances evidenced by this Note bear interest rate in excess of the maximum interest
permitted by applicable law. If any payment or installment to be made hereunder, whether interest, principal or both, shall not
be paid within fifteen (15) days of the date when due (other than principal due on the Maturity Date or at an earlier date if
due to an Event of Default or other circumstances), then, in addition to interest and without limiting the Lender’s rights
by reason of such default, there shall be paid, upon demand, a late charge equal to five percent (5.00%) of any such late payment
or installment.


 






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This
Note is issued pursuant to the aforementioned Loan Agreement, to which reference is made for a complete description of the rights,
obligations, limitations and restrictions of the Borrower and the Lender.


 


The
Borrower hereby authorizes the Lender to automatically debit the amount of each regularly scheduled payment of accrued interest,
when due and payable hereunder, against the Borrower's Operating Account (as defined in the Loan Agreement) established and maintained
with the Lender pursuant to the Loan Agreement.


 


Borrower
agrees to pay all expenses including reasonable attorney’s fees, which Lender may incur in effecting collection of this
Note, upon an Event of Default or following maturity.


 


No
delay or omission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any
other right of such Lender, 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 waives, to the extent permitted by applicable law, presentment, demand, protest and notices of every kind,
except as specifically provided herein with respect to notices of default or as provided by the terms of the Loan Agreement, and
assents to any one or more extensions or postponements of the time of payment or any other indulgences, to any substitutions,
exchanges or releases of collateral if at any time there be available to the Lender collateral for this Note, and to the additions
or releases of any other parties or persons primarily or secondarily liable hereunder.


 


Upon
receipt of an affidavit of an officer of the Lender as to the loss, theft, destruction or mutilation of the Note or any other
security document(s) which is not of public record and, in the case of any such destruction or mutilation, upon surrender and
cancellation of such Note or other document(s), Borrower will issue, in lieu thereof, a replacement Note or other document(s)
in the same principal amount thereof and otherwise of like tenor.


 


All
rights and obligations under this Note shall be governed by the laws of the Commonwealth of Massachusetts and this Note shall
be deemed to be made under seal.


 






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THE
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER DOCUMENTS CONTEMPLATED TO BE EXECUTED
IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE THE LOAN EVIDENCED HEREBY.


 


[SIGNATURE
PAGE FOLLOWS]


 




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IN
WITNESS WHEREOF, the Borrower has duly executed and delivered this Secured Revolving Line of Credit Note UNDER SEAL to be effective
as of the date first set forth above.


	 	 	 	 
	WITNESS: 	 	BORROWER:
	 	 	 
	 	 	BYRNA TECHNOLOGIES INC.,
	 	 	a Delaware corporation
	 	 	 	 
	/s/ James Dunfey	 	By:	/s/ Bryan Ganz 
	Print Witness Name: James Dunfey	 	Name:	Bryan Ganz 
	 	 	Title:	President