Exhibit 10.2


 


PROMISSORY NOTE


 


	Principal	Loan Date	Maturity	Loan No	Call / Coll	Account	Officer	Initials
	$5,000,000.00	05-27-2015	06-30-2017	53125	 	2920	DAD	 


 


References in the boxes above
are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.


 


Any item above containing “***”
has been omitted due to text length limitations.


 


	Borrower:	
        OURPET’S COMPANY, VIRTU COMPANY
and SMP COMPANY INCORPORATED

        1300 EAST STREET

        FAIRPORT HARBOR, OH 44077
	 	Lender:	
        FIRSTMERIT BANK, N.A.

        Commercial Credit Services #90383

        106 South Main Street

        Akron, OH 44308

        (800) 554-4362



 


	Principal Amount:  $5,000,000.00	Date of Note:  May 27, 2015


 


PROMISE TO PAY. OURPET’S
COMPANY, VIRTU COMPANY and SMP COMPANY INCORPORATED (“Borrower”) jointly and severally promise to pay to FIRSTMERIT BANK,
N.A. (“Lender”), or order, in lawful money of the United States of America, the principal amount of Five Million &
00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance
of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.


 


PAYMENT. Borrower will pay
this loan in one payment of all outstanding principal plus all accrued unpaid interest on June 30, 2017. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning May 31, 2015, with all
subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable
law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any late charges. Borrower will
pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.


 


VARIABLE INTEREST RATE.
The interest rate on this Note is subject to change from time to time based on changes in an index which is the LIBOR Rate (as
hereinafter defined), adjusted and determined, without notice to Borrower, as of the date of this Note and on the 1st day of each
calendar month hereafter (“Interest Rate Change Date”). The “LIBOR Rate” shall mean the London InterBank Offered
Rate of interest for an interest period of one (1) month, on the day that is two London Business Days preceding each Interest Rate
Change Date (the “Reset Date”). “London Business Day” shall mean any day on which commercial banks in London,
England are open for general business (the “Index”). Lender will tell Borrower the current Index rate upon Borrower’s
request. The interest rate change will not occur more often than each calendar month hereafter . Borrower understands that Lender
may make loans based on other rates as well. The Index currently is 0.181% per annum. Interest on the unpaid principal balance
of this Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate of 2.250 percentage
points over the Index, resulting in an initial rate of 2.431%. NOTICE: Under no circumstances will the interest rate on this Note
be more than the maximum rate allowed by applicable law.


 


INTEREST CALCULATION METHOD.
Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this method.


 


PREPAYMENT. Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early
payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights
under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in
full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount
must be mailed or delivered to: FIRSTMERIT BANK, N.A.; Commercial Credit Services #90383; 106 South Main Street; Akron, OH 44308.


 


LATE CHARGE. If a payment
is 10 days or more late, Borrower will be charged 7.000% of the regularly scheduled payment or $35.00, whichever is greater.


 


INTEREST AFTER DEFAULT.
Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by adding an additional
6.000 percentage point margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest
rate change that would have applied had there been no default. However, in no event will the interest rate exceed the maximum interest
rate limitations under applicable law.


 


DEFAULT. Each of the
following shall constitute an event of default (“Event of Default”) under this Note:


 


Payment Default. Borrower
fails to make any payment when due under this Note.


 


Other Defaults. Borrower
fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related
documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.


 


Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s
ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents.


 


False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.


 




    	 



    	 



    

 


Insolvency. The dissolution
or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.


 


Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method,
by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment
of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.


 


Events Affecting Guarantor.
Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness
or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by this Note.


 


Change In Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.


 


Adverse Change. A material
adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of this Note
is impaired.


 


Insecurity. Lender in
good faith believes itself insecure.


 


Cure Provisions. If any
default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision
of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to Borrower
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15)
days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.


 


LENDER’S RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,
and then Borrower will pay that amount.


 


ATTORNEYS’ FEES; EXPENSES.
Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all
other sums provided by law.


 


JURY WAIVER. Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.


 


GOVERNING LAW. This Note
will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
Ohio without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Ohio.


 


CHOICE OF VENUE. If there
is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Summit County, State of Ohio.


 


CONFESSION OF JUDGMENT.
Borrower hereby irrevocably authorizes and empowers any attorney-at-law, including an attorney hired by Lender, to appear in any
court of record and to confess judgment against Borrower for the unpaid amount of this Note as evidenced by an affidavit signed
by an officer of Lender setting forth the amount then due, attorneys’ fees plus costs of suit, and to release all errors, and waive
all rights of appeal. If a copy of this Note, verified by an affidavit, shall have been filed in the proceeding, it will not be
necessary to file the original as a warrant of attorney. Borrower waives the right to any stay of execution and the benefit of
all exemption laws now or hereafter in effect. No single exercise of the foregoing warrant and power to confess judgment will be
deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or void; but
the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this
Note have been paid in full. Borrower waives any conflict of interest that an attorney hired by Lender may have in acting on behalf
of Borrower in confessing judgment against Borrower while such attorney is retained by Lender. Borrower expressly consents to such
attorney acting for Borrower in confessing judgment.


 


DISHONORED ITEM FEE.
Borrower will pay a fee to Lender of $33.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge
with which Borrower pays is later dishonored.


 


RIGHT OF SETOFF. To the
extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower
may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would
be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing
on the debt against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender
to protect Lender’s charge and setoff rights provided in this paragraph.


 


LINE OF CREDIT. This
Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower’s accounts,
may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests
be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of
an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself
insecure.


 


CROSS-DEFAULT. IT SHALL
ALSO BE AN EVENT OF DEFAULT HEREUNDER IF BORROWER FAILS TO PERFORM OR COMPLY WITH ANY TERM, PROVISION OR CONDITION OF ANY OTHER
AGREEMENT, DOCUMENT OR INSTRUMENT EVIDENCING, SECURING OR SUPPORTING ANY INDEBTEDNESS OWING FROM BORROWER TO LENDER.


 




    	 



    	 



    

 


FEE PROVISION. UPON RECEIPT
OF A BILLING FROM LENDER, I AGREE TO PAY THE STATED LOAN FEE AND, WHEN APPLICABLE, THE STATED DOCUMENT PREPARATION FEE.


 


BUSINESS PURPOSE. THE
LOAN EVIDENCED HEREBY IS FOR COMMERCIAL OR BUSINESS PURPOSES, AND IS NOT INTENDED AND WILL NOT BE USED FOR PERSONAL, FAMILY, HOUSEHOLD,
EDUCATIONAL, CONSUMER OR AGRICULTURAL PURPOSES.


 


UNUSED COMMITMENT FEE.
Borrower hereby agrees to pay to Lender an Unused Commitment Fee (“UCF”) equal to (a) the Applicable Commitment Fee Rate
(calculated on the basis of a year of 360 days and for actual days elapsed (including the first day but excluding the last day
the Commitment remains outstanding)) multiplied by (b) the Commitment Amount less the sum of Direct Line Borrowings and Outstanding
Letters of Credit issued under the Commitment. The UCF shall be calculated by Lender as of the close of each calendar day. Borrower
shall be billed and remit the UCF on a calendar quarter basis in the month immediately following the end of the calendar quarter.


 


Applicable Commitment Fee Rate
means (.125%).


 


PRIOR NOTE. This Note
is a restatement of the indebtedness evidenced by, and is a replacement and consolidation of the $5,000,000.00 Promissory Note
of Borrower dated September 4, 2014 payable to the order of Lender, including any and all amendments thereto (the “Original
Note”), with a principal balance of $2,430,031.93 as of the date hereof, and nothing contained herein shall be construed;
(1) to deem paid or forgiven the unpaid principal amount of, or unpaid accrued interest on, said Promissory Note outstanding at
the time of its replacement by this Note; or (2) to release, cancel, terminate or otherwise adversely affect all or any part of
any lien, mortgage, deed of trust, assignment, security interest or other encumbrance heretofore granted or for the benefit of
the payee of said Promissory Note which has not otherwise been expressly released.


 


SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns,
and shall inure to the benefit of Lender and its successors and assigns.


 


GENERAL PROVISIONS. If
any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein
as “charge or collect”), any amount in the nature of interest or in the nature of a fee for this loan, which would in
any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for this loan than the
maximum Lender would be permitted to charge or collect by federal law or the law of the State of Ohio (as applicable). Any such
excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Each Borrower understands and agrees that, with or without notice
to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise
extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (c)
exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution
of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any non-judicial
sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (e) release, substitute,
agree not to sue, or deal with any one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; and (f) determine how, when and what application of payments and credits shall be made on any other indebtedness
owing by such other Borrower. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this
loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in
the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification
is made. The obligations under this Note are joint and several.


 




    	 



    	 



    

 


PRIOR TO SIGNING THIS NOTE,
EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE.


 


BORROWER ACKNOWLEDGES RECEIPT
OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


NOTICE: FOR THIS NOTICE “YOU”
MEANS THE BORROWER AND “CREDITOR” AND “HIS” MEANS LENDER.


 


WARNING - BY SIGNING THIS
PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT
YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.


 


BORROWER:


 


OURPET’S COMPANY


 


By: /s/ Steven Tsengas


STEVEN TSENGAS, President
of OURPET’S


COMPANY


 


VIRTU COMPANY


 


By: /s/ Steven Tsengas


STEVEN TSENGAS, President
of VIRTU COMPANY


 


SMP COMPANY INCORPORATED


 


By: /s/ Steven Tsengas


STEVEN TSENGAS, President
of SMP COMPANY


INCORPORATED


 


LASER PRO Lending, Ver. 14.2.0.021
Copr. D+H USA Corporation 1997, 2015. All Rights Reserved. - OH d:\laserpro\commercial\prod\CFI\LPL\D20.FC TR-5021287 PR-51 (M)