Document:

Promissory Note-Demand

  
 Exhibit 10.6

  
 TAX I.D. NO. 800079419 
  
 PROMISSORY NOTE-DEMAND 
 (Eurodollar Rate) 
  

			
	 $9,300,000
	 	Detroit, Michigan
	 	 	October 28, 2004

  
 ON DEMAND, FOR VALUE
RECEIVED, the undersigned, VERI-TEK INTERNATIONAL, CORP. f/k/a QUANTUM-VERITEK, INC., a Michigan corporation (“Borrower”), promises to pay to the order of COMERICA BANK, a Michigan banking corporation “Bank”), in lawful currency
of the United States of America, the principal sum of NINE MILLION THREE HUNDRED THOUSAND DOLLARS ($9,300,000), or so much of said sum as has been advanced and is then outstanding under this Note, together with interest thereon as hereinafter set
forth. 
  
 Notwithstanding anything to the contrary set forth
herein, in no event shall the outstanding principal balance under this Note exceed Six Million Seven Hundred Thousand Dollars ($6,700,000) (“Step Down Amount”) on or after February 1, 2005 (“Step Down Date”). On the Step Down
Date, Borrower shall immediately pay to Bank any principal outstanding hereunder in excess of the Step Down Amount. 
  
 This Note is a note under which Advances, repayments and re-Advances may be made from time to time, subject to the terms and conditions of this Note. At
no time shall the Bank be under any obligation to make any Advances to the Borrower pursuant to this Note (notwithstanding anything expressed or implied in this Note or elsewhere to the contrary, including without limit if the Bank supplies the
Borrower with a borrowing formula) and the Bank, at any time and from time to time, without notice, and in its sole discretion, may refuse to make Advances or re-advances to the Borrower without incurring any liability due to this refusal and
without affecting the Borrower’s liability under this Note for any and all amounts advanced. 
  
 Each of the Advances made hereunder shall bear interest at the Eurodollar-based Rate or the Prime-based Rate, as elected by Borrower or as otherwise
determined under this Note. 
  
 Accrued and unpaid interest on the
unpaid balance of each outstanding Prime-based Advance shall be payable monthly, in arrears, commencing on November 1, 2004, and on the first Business Day of each succeeding month thereafter, until maturity (whether as stated herein, by
acceleration, or otherwise). Interest accruing at the Prime-based Rate shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in
the Applicable Interest Rate as a result of any change in the Prime-based Rate on the date of each such change in the Prime-based Rate. 
  

 Accrued and unpaid interest on each Eurodollar-based Advance shall be payable on the last day of the
Interest Period applicable thereto (unless sooner accelerated in accordance with the terms of this Note); provided, however, if such Interest Period in respect of any such Eurodollar-based Advance is more than three (3) months, interest thereon
shall also be payable at intervals of three (3) months from the date of such Advance. Interest accruing at the Eurodollar-based Rate shall be computed on the basis of a 360 day year and shall be assessed for the actual number of days elapsed from
the first day of the Interest Period applicable thereto but not including the last day thereof. 
  
 From and after the occurrence of any Default hereunder, and so long as any such Default remains unremedied or uncured thereafter, the Indebtedness
outstanding under this Note shall bear interest at a per annum rate of three percent (3%) above the otherwise Applicable Interest Rate, which interest shall be payable upon demand. 
  
 The amount and date of each Advance, its Applicable Interest Rate, its Interest Period, if any, and the amount and date of
any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve
Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Note, when due in accordance with the terms hereof. 
  

Borrower may request an Advance hereunder, including the refunding of an outstanding Advance as the same type of Advance or the conversion of an
outstanding Advance as the same type of Advance, upon the delivery to Bank of a Request for Advance executed by an authorized officer of Borrower, subject to the following: 
  

	 	(a)	no Default, and no condition or event which, with the giving of notice or the running of time, or both, would constitute a Default, shall have occurred and be continuing or exist
under this Note; 

  

	 	(b)	each such Request for Advance shall set forth the information required on the Request for Advance form annexed hereto as Exhibit “A”; 

  

	 	(c)	each such Request for Advance shall be delivered to Bank by 11:00 a.m. (Detroit, Michigan time) three (3) Business Days prior to the proposed date of Advance in the case of
Eurodollar-based Advances, and by 2:00 p.m. (Detroit, Michigan time) on the proposed date of Advance in the case of Prime-based Advances; 

  

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	 	(d)	the principal amount of each Eurodollar-based Advance shall be at least Five Hundred Thousand Dollars ($500,000) and at any one time there shall not be in effect more than one (1)
Interest Period; 

  

	 	(e)	the proposed date of any refunding of any outstanding Eurodollar-based Advance as another Eurodollar-based Advance or the conversion of any outstanding Eurodollar-based Advance to a
Prime-based Advance shall only be on the last day of the Interest Period applicable to such outstanding Eurodollar-based Advance; and 

  

	 	(f)	a Request for Advance, once delivered to Bank, shall not be revocable by Borrower; provided, however, as aforesaid, Bank shall not be obligated to make any Advance under this Note.

  
 If, as to any outstanding Eurodollar-based
Advance, Bank shall not receive a timely Request for Advance in accordance with the foregoing requesting the refunding of such Advance as a Eurodollar-based Advance, the principal amount of such Advance which is not then repaid shall be
automatically converted to a Prime-based Advance on the last day of the Interest Period applicable thereto, subject in all respects to the terms and conditions of this Note. The foregoing shall not in any way whatsoever limit or otherwise affect any
of Bank’s rights or remedies under this Note upon the occurrence of any Default hereunder, or any condition or event which, with the giving of notice or the running of time, or both, would constitute a Default. 
  
 Borrower may prepay all or part of the outstanding balance of any Prime-based
Advance under this Note at any time. Borrower may prepay all or part of any Eurodollar-based Advance on the last day of the Interest Period applicable thereto, provided that the aggregate balance of Eurodollar-based Advances outstanding after such
prepayment shall be at least Five Hundred Thousand Dollars ($500,000), and the unpaid portion of such Eurodollar-based Advance which is then refunded or converted shall be subject to the limitations set forth in this Note. Any prepayment made in
accordance with this paragraph shall be without premium or penalty. Any other prepayment shall be otherwise restricted by and subject to the terms of this Note. 
  

Subject to the definition of an “Interest Period” hereunder, in the event that any payment under this Note becomes due and payable on any day
which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this
Note. 
  

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 All payments to be made by Borrower to Bank under or pursuant to this Note shall be in immediately
available funds, without setoff or counterclaim, and in the event that any payments submitted hereunder are in funds not available until collected, said payments shall continue to bear interest until collected. Borrower hereby authorizes Bank to
charge any account of Borrower with Bank for all sums due hereunder when due in accordance with the terms hereof. A late payment charge equal to 5% of each late payment may be charged on any payment not received by the Bank within 10 calendar days
after the payment due date, but acceptance of payment of this charge shall not waive any Default under this Note. 
  
 If Borrower makes any payment of principal with respect to any Eurodollar-based Advance on any day other than the last day of the Interest Period
applicable thereto (whether voluntarily, by acceleration, demand, or otherwise), or if Borrower fails to borrow any Eurodollar-based Advance after notice has been given by Borrower to Bank in accordance with the terms of this Note requesting such
Advance, or if Borrower fails to make any payment of principal or interest in respect of a Eurodollar-based Advance when due, Borrower shall reimburse Bank, on demand, for any resulting loss, cost or expense incurred by Bank as a result thereof,
including, without limitation, any such loss, cost or expense incurred in obtaining, liquidating, employing or redeploying deposits from third parties, whether or not Bank shall have funded or committed to fund such Advance. Such amount payable by
Borrower to Bank may include, without limitation, an amount equal to the excess, if any, of (a) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last day of the relevant Interest Period, at the applicable rate of interest for said Advance(s) provided under this Note, over (b) the amount of interest (as reasonably
determined by Bank) which would have accrued to Bank on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. Calculation of any amounts payable to Bank under this paragraph
shall be made as though Bank shall have actually funded or committed to fund the relevant Eurodollar-based Advance through the purchase of an underlying deposit in an amount equal to the amount of such Advance and having a maturity comparable to the
relevant Interest Period; provided, however, that Bank may fund any Eurodollar-based Advance in any manner it deems fit and the foregoing assumptions shall be utilized only for the purpose of the calculation of amounts payable under this paragraph.
Upon the written request of Borrower, Bank shall deliver to Borrower a certificate setting forth the basis for determining such losses, costs and expenses, which certificate shall be conclusively presumed correct, absent manifest error. 

 
 For any Eurodollar-based Advance, if Bank shall designate a Eurodollar
Lending Office which maintains books separate from those of the rest of Bank, Bank shall have the option of maintaining and carrying such Advance on the books of such Eurodollar Lending Office. 
  

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 If, with respect to any Interest Period, Bank determines that, (a) by reason of circumstances affecting
the foreign exchange and interbank markets generally, deposits in Eurodollars in the applicable amounts or for the relative maturities are not being offered to Bank for such Interest Period, or (b) if the rate of interest referred to in the
definition of “Eurodollar-based Rate” upon the basis of which the rate of interest for a Eurodollar-based Advance is to be determined does not accurately or fairly cover or reflect the cost to Bank of making or maintaining a
Eurodollar-based Advance hereunder, then Bank shall forthwith give notice thereof to the Borrower. Thereafter, until Bank notifies Borrower that such conditions or circumstances no longer exist, the right of Borrower to request a Eurodollar-based
Advance and to convert an Advance to or refund an Advance as a Eurodollar-based Advance shall be suspended. 
  
 If, after the date hereof, the introduction of, or any change in, any applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by Bank (or its Eurodollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority,
shall make it unlawful or impossible for the Bank (or its Eurodollar Lending Office) to make or maintain any Advance with interest at the Eurodollar-based Rate, Bank shall forthwith give notice thereof to Borrower. Thereafter, (a) until Bank
notifies Borrower that such conditions or circumstances no longer exist, the right of Borrower to request a Eurodollar-based Advance and to convert an Advance to or refund an Advance as a Eurodollar-based Advance shall be suspended, and thereafter,
Borrower may select only the Prime-based Rate as the Applicable Interest Rate hereunder, and (b) if Bank may not lawfully continue to maintain an outstanding Advance to the end of the then current Interest Period applicable thereto, the Prime-based
Rate shall be the Applicable Interest Rate for the remainder of such Interest Period with respect to such outstanding Advance. 
  
 If the adoption after the date hereof, or any change after the date hereof in, any applicable law, rule or regulation of any governmental authority,
central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Bank (or its Eurodollar Lending Office) with any request or directive (whether or not having the force of law) made by any such authority,
central bank or comparable agency after the date hereof: 
  

	 	(a)	shall subject Bank (or its Eurodollar Lending Office) to any tax, duty or other charge with respect to this Note or any Advance hereunder or shall change the basis of taxation of
payments to Bank (or its Eurodollar Lending Office) of the principal of or interest on any Advance or any other amounts due under this Note in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its Eurodollar
Lending Office imposed by the jurisdiction in which Bank’s principal executive office or Eurodollar Lending Office is located); or 

  

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	 	(b)	shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by Bank (or its Eurodollar Lending Office) or shall impose on Bank (or its Eurodollar Lending Office) or the foreign exchange and interbank markets any other
condition affecting any Advance under this Note; 

  
 and the result
of any of the foregoing is to increase the cost to Bank of maintaining any part of the indebtedness hereunder or to reduce the amount of any sum received or receivable by Bank under this Note by an amount deemed by the Bank to be material, then
Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of
Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes,
absent manifest error in computation. 
  
 In the event that any
applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to Bank, or any interpretation or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by Bank with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk-based capital guidelines, affects or would affect the amount
of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the making or
maintaining any Advances hereunder, and such increase has the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the making or maintaining of such Advances
hereunder to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen
(15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of
return which Bank reasonably determines to be allocable to the existence of any obligations of the Bank hereunder or to the making or maintaining any Advances hereunder. A certificate of Bank as to the amount of such compensation, prepared in good
faith and in reasonable detail by the Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error in computation. 
  
 THE BORROWER ACKNOWLEDGES THAT THIS NOTE MATURES UPON ISSUANCE, AND THAT THE BANK, AT ANY TIME, WITHOUT NOTICE, AND 

  

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WITHOUT REASON, MAY DEMAND THAT THIS NOTE BE IMMEDIATELY PAID IN FULL. THE DEMAND NATURE OF THIS NOTE SHALL NOT BE DEEMED MODIFIED BY REFERENCE TO A DEFAULT
IN THIS NOTE OR IN ANY AGREEMENT TO A DEFAULT BY THE BORROWER OR TO THE OCCURRENCE OF AN EVENT OF DEFAULT (COLLECTIVELY AN “EVENT OF DEFAULT”). FOR PURPOSES OF THIS NOTE, TO THE EXTENT THERE IS REFERENCE TO AN EVENT OF DEFAULT THIS
REFERENCE IS FOR THE PURPOSE OF PERMITTING THE BANK TO ACCELERATE INDEBTEDNESS NOT ON A DEMAND BASIS AND TO RECEIVE INTEREST AT THE DEFAULT RATE PROVIDED IN THE DOCUMENT EVIDENCING THE RELEVANT INDEBTEDNESS. IT IS EXPRESSLY AGREED THAT THE BANK MAY
EXERCISE ITS DEMAND RIGHTS UNDER THIS NOTE WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED AND REGARDLESS OF WHETHER AN INTEREST PERIOD IS IN EFFECT. THE BANK, WITH OR WITHOUT REASON AND WITHOUT NOTICE, MAY FROM TIME TO TIME MAKE DEMAND FOR PARTIAL
PAYMENTS UNDER THIS NOTE AND THESE DEMANDS SHALL NOT PRECLUDE THE BANK FROM DEMANDING AT ANY TIME THAT THIS NOTE BE IMMEDIATELY PAID IN FULL. ALL PAYMENTS UNDER THIS NOTE SHALL BE IN IMMEDIATELY AVAILABLE UNITED STATES FUNDS, WITHOUT SETOFF OR
COUNTERCLAIM. 
  
 This Note and any other indebtedness and
liabilities of any kind of Borrower to Bank, and any and all modifications, renewals or extensions thereof, whether joint or several, contingent or absolute, direct or indirect, now existing or later arising, and however evidenced (collectively the
“Indebtedness”), are secured by and Bank is granted a security interest in all items at any time deposited in any account of Borrower with Bank and by all proceeds of these items (cash or otherwise), all account balances of Borrower from
time to time with Bank, by all property of Borrower from time to time in the possession of Bank, and by any other collateral, rights and properties described in each and every mortgage, security agreement, pledge, assignment and other security or
collateral agreement which has been, or will at any time(s) later be, executed by Borrower or others to or for the benefit of Bank (collectively the “Collateral”). 
  
 If Borrower or any guarantor under a guaranty of all or part of the Indebtedness (“guarantor”) (a) fail(s) to pay
this Note, or any part thereof, or any of the Indebtedness when due, by maturity, acceleration or otherwise, or fail(s) to pay any Indebtedness owing on a demand basis upon demand; or (b) fail(s) to comply with any of the terms or provisions of any
agreement between Borrower or any guarantor and Bank and such failure remains uncured after the expiration of any applicable cure period provided in any such agreement; or (c) become(s) insolvent or the subject of a voluntary or involuntary
proceeding in bankruptcy, or a reorganization, arrangement or creditor composition proceeding, which proceeding, if involuntary, is not stayed or dismissed within forty-five (45) days after commencement, (if a business entity) cease(s) doing
business as a going concern, (if a natural person) die(s) or become(s) incompetent, (if a partnership) dissolve(s) or any general partner of it dies, becomes 

  

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incompetent or becomes the subject of a bankruptcy proceeding, or (if a corporation) is the subject of a dissolution, merger or consolidation; or (d) if any
warranty or representation made by Borrower or any guarantor in connection with this Note or any of the Indebtedness shall be discovered to be untrue or incomplete in any material respect; (e) or if there is any termination, notice of termination,
or breach of any guaranty, pledge, collateral assignment or subordination agreement relating to all or any part of the Indebtedness; or (f) if there is any failure by Borrower or any guarantor to pay, when due, any of its indebtedness (other than to
the Bank) or in the observance or performance of any term, covenant or condition in any document evidencing, securing or relating to such indebtedness; or (g) if Bank deems itself insecure, believing in good faith that the prospect of payment or
performance of this Note or any of the Indebtedness is materially impaired or shall fear deterioration, removal or waste of any of the Collateral; or (h) if there is filed or issued a levy or writ of attachment or garnishment or other like judicial
process upon Borrower or any guarantor or any of the Collateral, including, without limit, any accounts of Borrower or any guarantor with Bank, then Bank, upon the occurrence and at any time during the continuance or existence of any of these
conditions or events (each a “Default”), may at its option and without prior notice to Borrower, declare any or all of the Indebtedness to be immediately due and payable (notwithstanding any provisions contained in the evidence of it to
the contrary), sell or liquidate all or any portion of the Collateral, set off against the Indebtedness any amounts owing by Bank to Borrower, and exercise any one or more of the rights and remedies granted to Bank by any agreement with Borrower
given to it under applicable law, or otherwise. 
  
 Borrower
waives presentment, demand, protest, notice of dishonor, notice of demand or intent to demand, notice of acceleration or intent to accelerate, and all other notices, and agrees that no extension or indulgence to Borrower, or release, substitution or
nonenforcement of any security, or release or substitution of any guarantor or any other party, whether with or without notice, shall affect the obligations of Borrower. Borrower waives all defenses or right to discharge available under Section
3-605 of the Uniform Commercial Code and waives all other suretyship defenses or right to discharge. Borrower agrees that Bank has the right to sell, assign, or grant participations, or any interest, in any or all of the Indebtedness, and that, in
connection with such right, but without limiting its ability to make other disclosures to the full extent allowable, Bank may disclose all documents and information which the Bank now or later has relating to Borrower and the Indebtedness.

  
 Borrower agrees to reimburse Bank, or any other holder or
owner of this Note, for any and all costs and expenses (including, without limit, court costs, legal expenses and reasonable attorneys’ fees, whether inside or outside counsel is used, whether or not suit is instituted, and, if suit is
instituted, whether at the trial court level, appellate level, in a bankruptcy, probate or administrative proceeding or otherwise) incurred in collecting or attempting to collect this Note or the Indebtedness or incurred in any other matter or
proceeding relating to this Note or the Indebtedness. 
  

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 Borrower acknowledges and agrees that there are no contrary agreements, oral or written, establishing a
term of this Note and agrees that the terms and conditions of this Note may not be amended, waived or modified except in a writing signed by a duly authorized officer of Bank expressly stating that the writing constitutes an amendment, waiver or
modification of the terms of this Note. If any provision of this Note is unenforceable in whole or part for any reason, the remaining provisions shall continue to be effective. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF MICHIGAN. 
  
 If this Note is signed by two or
more parties (whether by all as makers or by one or more as an accommodation party or otherwise), the obligations and undertakings under this Note shall be that of all and any two or more jointly and also of each severally. This Note shall bind the
Borrower, and the Borrower’s respective heirs, personal representatives, successors and assigns. 
  
 For the purposes of this Note, the following terms have the following meanings: 
  
 “Advance” means a borrowing requested by Borrower and made by Bank under this Note, including any refunding of an
outstanding Advance as the same type of Advance or the conversion of any such outstanding Advance to another type of Advance, and shall include a Eurodollar-based Advance and a Prime-based Advance. 
  
 “Applicable Interest Rate” means the Eurodollar-based Rate or the
Prime-based Rate, as selected by Borrower from time to time or as otherwise determined in accordance with the terms and conditions of this Note. 
  
 “Business Day” means any day, other than a Saturday, Sunday or holiday, on which Bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in Detroit, Michigan. 
  
 “Eurodollar-based Advance” means an Advance which bears interest at the Eurodollar-based Rate. 
  
 “Eurodollar-based Rate” means a per annum interest rate which is equal to the sum of two and one-quarter of one percent (2 1⁄4%),
plus the quotient of: 
  

	 	(a)	 the per annum interest rate at which Bank’s Eurodollar Lending Office offers deposits to prime banks in the eurodollar market in an amount comparable to the

  

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relevant Eurodollar-based Advance and for a period equal to the relevant Interest Period at or about 11:00 a.m. (Detroit, Michigan time) (or as soon
thereafter as practical) two (2) Business Days prior to the first day of such Interest Period; 

  
 divided by 
  

	 	(b)	a percentage equal to 100% minus the maximum rate during such Interest Period at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in
and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar
deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category. 

  
 “Eurodollar Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such
other branch of Bank, domestic or foreign, as it may hereafter designate as its Eurodollar Lending Office by notice to Borrower. 
  
 “Interest Period” means a period of one (1), two (2), three (3), six (6), nine (9) or twelve (12) months, as selected by Borrower pursuant to
the terms of this Note, commencing on the day a Eurodollar-based Advance is made, provided that any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day, except that if
the next succeeding Business Day falls in another calendar month, the Interest Period shall end on the next preceding Business Day, and when an Interest Period begins on a day which has no numerically corresponding day in the calendar month during
which such Interest Period is to end, it shall end on the last Business Day of such calendar month. 
  
 “Prime-based Advance” shall mean an Advance which bears interest at the Prime-based Rate. 
  
 “Prime Rate” means the per annum interest rate established by Bank
as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time. 
  
 “Prime-based Rate” shall mean a per annum interest rate which is equal to the greater of (i) the Prime Rate; or
(ii) the rate of interest equal to the sum of (a) one percent (1%) and (b) the rate of interest equal to the average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers
(the “Overnight 

  

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Rates”), as published by the Federal Reserve Bank of New York, or, if the overnight Rates are not so published for any day, the average of the
quotations for the Overnight Rates received by Bank from three (3) Federal funds brokers of recognized standing selected by Bank, as the same may be changed from time to time. 
  
 “Request for Advance” means a Request for Advance issued by Borrower under this Note in the form annexed to this
Note as Exhibit ”A”. 
  
 Borrower agrees to make all
payments to Bank of any and all amounts due and owing by Borrower to Bank hereunder, including, without limitation, the payment of principal and interest on any Advance, on the date provided for such payment, in United States Dollars in immediately
available funds, at the office of Bank located at Comerica Tower at Detroit Center, 500 Woodward Avenue, Detroit, Michigan 48226, or such other address as Bank may notify Borrower in writing. 
  
 No delay or failure of Bank in exercising any right, power or privilege
hereunder shall affect such right, power or privilege, nor shall any single or partial exercise thereof preclude any further exercise thereof, or the exercise of any other power, right or privilege. The rights of Bank under this Agreement are
cumulative and not exclusive of any right or remedies which Bank would otherwise have, whether by other instruments or by law. 
  
 BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING
HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS NOTE OR THE INDEBTEDNESS HEREUNDER. 
  

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 This Note amends, restates and replaces in its entirety that certain Promissory Note-Demand (Eurodollar
Rate) dated as of July 21, 2004 made in the original principal amount of $9,300, 000 by the undersigned payable to Bank. 
  

			
	VERI-TEK INTERNATIONAL, CORP. f/k/a/ QUANTUM-VERITEK, INC.
		
	By:	 	 /s/ David V. Harper

		
	 Its:
	 	 CFO

  

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 EXHIBIT “A”

  
 REQUEST FOR ADVANCE 
  
 The undersigned hereby requests COMERICA BANK (“Bank”) to make an
                                        
1 Advance to the undersigned on
                                        ,
                    , 200   in the amount of
                                        
                             Dollars
($                        ) under the Promissory Note-Demand dated as of October     , 2004,
issued by the undersigned to said Bank in the face amount of Nine Million Three Hundred Thousand Dollars ($9,300,000) (herein called “Note”). The Interest Period for the requested Advance, if applicable, shall be
                                     *2. The last day of the Interest Period for the amounts being converted or refunded hereunder, if
applicable, is
                                        
    , 200  . 
  
 The
undersigned certifies that no Event of Default, or any condition or event which, with the giving of notice or the running of time, or both, would constitute an Event of Default, has occurred and is continuing under the Note, and none will exist upon
the making of the Advance requested hereunder. The undersigned further certifies that upon advancing the sum requested hereunder, the aggregate principal amount outstanding under the Note will not exceed the face amount thereof. If the amount
advanced to the undersigned under the Note shall at any time exceed the face amount thereof, the undersigned will pay such excess amount on demand. 
  
 The undersigned hereby authorizes said Bank to disburse the proceeds of this Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned may otherwise direct, unless this Request for Advance is being submitted for a conversion or refunding, in which case it shall refund or convert that portion stated above of the existing
outstanding under the Note. 
  
 Capitalized terms used but not
otherwise defined herein shall have the respective meanings given to them in the Note. 

	1	Insert, as applicable, “Eurodollar-based” or “Prime-based”. 

  

	2	*For a Eurodollar-based Advance insert, as applicable, “two months”, “three months” or “six months”. 

  

 Dated this              day of
                        , 200  . 
  

			
	VERI-TEK INTERNATIONAL, CORP. f/k/a/ QUANTUM-VERITEK, INC.
		
	By:	 	 
		
	 Its:
	 	 

  

 220% Subordinated Note Due 2008

  Exhibit 10.7 
   
 QUANTUM VALUE PARTNERS, LP. 
  

20% SUBORDINATED NOTE DUE 2008 
  

			
	$5,900,000	 	Dated: October 31, 2003

  
 FOR VALUE RECEIVED,
the undersigned, Quantum-Veritek, Inc. a Michigan corporation (the “Company”), hereby promises to pay to the order of Quantum Value Partners, LP (“Payee”), at Payee’s address as specified below (or at such other place as the
holder of this Note (the “Holder”) may from time to time hereafter direct by notice in writing to the Company), the principal amount of $5,900,000 on August 1, 2008 (the “Maturity Date”). 
  
 1. Interest and Payment. 
  
 I.A.1.1. This Note shall bear interest on the principal amount thereof outstanding from time to time at the rate of 20% per annum.
Commencing April 1, 2004, Payee shall make interest only payments in cash equal to eight percent per annum on the outstanding balance. Commencing April 1, 2004, in lieu of payment of the additional 12% per annum interest that would otherwise be paid
on the interest payment date, Company shall increase the principal balance due hereunder by an amount equal to the amount of such cash that would otherwise have been paid to Holder. The interest shall payable quarterly in arrears commencing April 1,
2004 and each quarter thereafter (each, an Interest Payment Date”), and on the Maturity Date together with the principal amount of this Note at the time outstanding. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months, for the actual number of days elapsed. Notwithstanding anything to the contrary contained in this Note, the Company shall not be obligated to pay, and the Holder shall not be entitled to charge, collect or receive interest in excess of the
maximum rate allowed by applicable law. If during any period of time the interest rate specified herein exceeds such maximum rate, then, any amounts of interest collected by the Holder in excess of such maximum rate shall be applied to the reduction
of the unpaid principal amount of this Note. 
  
 I.A.1.2. All payments of the
principal of, accrued interest on, and other amounts payable under this Note shall be payable in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts. At the option of
the Holder of this Note, the Company will make all payments on account of this Note by electronic funds transfer in funds immediately available at the place of payment to a deposit account with a commercial bank designated by the Holder in writing
at least three business days prior to the relevant Interest Payment Date, Maturity Date or any prepayment date. All payments received on account of this Note shall be applied first to the payment of accrued and unpaid interest on this Note and then
to the reduction of the unpaid principal amount of this Note. 
  
 I.A.1.3. In the
event that the date for the payment of any amount payable under this Note falls due on a Saturday, Sunday or public holiday under the laws of the State of Michigan, the time for payment of such amount shall be extended to the next succeeding
business day and any principal amount otherwise due and payable shall continue to bear interest until paid in full on such extended payment date. 
  

 2. Prepayment. The Company may, upon at least five business days prior written notice to the Holder of this Note,
prepay the principal of this Note outstanding at any time in whole at any time and in part from time to time, without penalty or premium, thereof together with interest on the principal amount being prepaid accrued through the date of prepayment.

  
 3. Covenants. So long as any portion of the indebtedness evidenced by
this Note, whether principal, accrued and unpaid interest or any other amount at any time due hereunder remains unpaid, the Company covenants and agrees that: 
  

I.A.3.1. It will duly and punctually pay the principal of, and accrued interest on, and other amounts payable under this Note in each case, in accordance with the
terms of this Note. 
  
 I.A.3.2. It will promptly pay or discharge, and will cause
each of its subsidiaries to pay or discharge, before the same may become delinquent, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any such subsidiary, and (b) all claims for labor, materials and supplies
which, if unpaid, might by law become a lien or charge upon the property of the Company; or any such subsidiary; provided, however, that neither the Company nor any such subsidiary shall be required to pay or discharge, or cause to be paid or
discharged, any such tax, assessment, charge or claim (i) whose amount, applicability or validity is being contested in good faith by appropriate proceedings, or (ii) if the effect of such failure to pay or discharge would not have a material
adverse effect on the assets, business, operations, properties or condition (financial or otherwise) of the Company and its subsidiaries taken as a whole. 
  
 I.A.3.3. It will deliver to the Holder of this Note, forthwith upon any executive officer of the Company becoming aware of the existence of a default in performance of
any covenant hereunder which with or without the giving of notice or lapse of time or both would have a material adverse effect on the ability of the Company to perform its obligation under the Notes or on the consolidated financial condition or
operating results of the Company, Event of Default or material adverse change in the financial condition or results of operations of the Company and its subsidiaries, on a consolidated basis, a notice specifying with particularity such default,
Event of Default or material adverse change and further stating what action the Company has taken, is taking or proposes to take with respect thereto. 
  
 I.A.3.4. It shall, and shall cause each of its subsidiaries to, keep its books, records and accounts in accordance with generally accepted accounting principles applied
on a basis consistent with preceding years. 
  
 I.A.3.5. It will maintain, and
shall cause each of its subsidiaries to maintain, with financially sound and responsible insurers, insurance with respect to its properties and business against such casualties and contingencies and in such amounts as are customary’ in the case
of similarly situated corporations engaged in the same or similar business. 
  
 I.A.3.6. Except to the extent otherwise permitted by this Note, it will, and will cause each of its subsidiaries to, (i) do or cause or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect
its corporate existence, except that any such subsidiary may merge with or into the Company or any other subsidiary of the Company so long as the surviving corporation of the merger is the Company or a wholly-owned subsidiary of the Company; (ii) at
all times maintain, preserve and protect all of its patents, trademarks, service marks, trade names, service names, copyrights, licenses, 

  

 2 

 
permits franchises and other rights, including distributorship and franchise agreements, that continue to be useful in some material respect in the conduct
of its business; and (iii) preserve all the remainder of its property useful in the conduct of its business and keep the same in good repair, working order and condition (ordinary wear and tear excepted), and from time to time, make, or cause to be
made, all needful and proper repairs, renewals, replacements, betterments and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, that nothing in this
Section IA3.6 shall prevent the Company or any subsidiary of the Company from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the board
of directors of the Company or such subsidiary, or of any executive officer of the Company or any such subsidiary, as applicable, having managerial responsibility for any such property, desirable in the conduct of the business of the Company or such
subsidiary. It will, and will cause each subsidiary of the Company to, remain in substantially the same businesses in which the Company and its subsidiaries are engaged as of the date of this Note or in other types of businesses reasonably related
or incidental thereto, except to the extent that any such business of the Company or any such subsidiary is continued by the Company or any other subsidiary of the Company. 
  
 I.A.3.7 It will not, and will not permit any subsidiary of the Company to, make or have outstanding any loan or advance to, or own purchase
or acquire any obligations (other than accounts receivable generated in the ordinary course of business) or securities of, or any interest in, or make any capital contribution to or acquire all or substantially all of the assets of, any other person
or entity, other than: (a) strategic investments which in the good faith business judgment of the board of directors of the Company or the board of directors of the subsidiary of the Company which proposes to make such investment, as the case may
be, are in furtherance of the business purposes of the Company or such subsidiary; (b) endorsement of negotiable instruments for collection or deposit in the ordinary course of business; (c) ownership of stock of the Company’s subsidiaries; and
(d) prepayment of the Notes as permitted by the terms thereof. 
  
 I.A.3.8. It
will, and will cause each of its subsidiaries to, comply, in all material respects with all requirements of law and contractual obligations applicable to or binding upon any of them. 
  
 I.A.3.9. It will not, and will not permit any subsidiaries to, directly or indirectly purchase, acquire or lease any property from, or sell,
transfer or lease any property to, or otherwise deal with, in the ordinary course of business or otherwise, any affiliate of the Company or such subsidiary, except upon terms not less favorable to Company or such subsidiary than if the Affiliate
relationship did not exist and provided the transaction is approved by a majority of the independent directors of the board of directors of the Company. 
  
 4. Events of Default. If any of the following events (each an “Event of Default”) shall occur: 
  
 I.A.4.1. The Company fails to pay the principal of, any installment of interest accrued on,
or any other amount which becomes due under, this Note or any of the other Notes as and when the same becomes due and payable hereunder or thereunder; or 
  
 I.A.4.2. The Company defaults in the due observance or performance of any of its covenants contained in this Note or any of the other Notes (other than a Default
involving the payment of money due under this Note or any of the other Notes) and such default is not cured within 10 days after the occurrence of such default; or 
  

 3 

 I.A.4.3. The Company or any subsidiary thereof shall (i) become insolvent, however evidenced, (ii) apply for or consent
to the appointment of, or the taking of possession by, a receiver, trustee or similar official of or for itself or of or for all or a substantial part of its property, (iii) make an assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Federal Bankruptcy Code, as now or hereafter in effect (the “Code”), (v) file a petition seeking to take advantage of any other bankruptcy, insolvency, moratorium, reorganization or other similar law of any
jurisdiction, (vi) acquiesce as to or fail to controvert in a timely or appropriate manner, an involuntary case filed against the Company or such subsidiary under the Code, or (vii) take any corporate action in furtherance of any of the foregoing;
or 
  
 I.A.4.4. A proceeding or involuntary case shall be commenced, without the
application or consent of the Company or any subsidiary thereof, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding up or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver or similar official for it or for all or any substantial part of its assets, or (iii) similar relief in respect of it under any law providing for the relief of debtors, and any such proceeding or case shall continue undismissed, or
unstayed and in effect, for a period of 90 days; or 
  
 I.A.4.5. The dissolution
of the Company or any of its subsidiaries or any vote in favor thereof by the board of directors and shareholders of the Company or such subsidiary, provided that any subsidiary may be dissolved to the extent its assets are transferred to, and its
liabilities are assumed by, the Company or another subsidiary of the Company or to the extent such dissolution would not have an adverse effect on the Company and its subsidiaries taken as a whole. 
  
 5. Suits for Enforcement and Remedies. If any one or more Events of Default shall
occur, the Holder may proceed to (i) protect and enforce Holder’s rights either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, condition or agreement contained in this Note or in any
agreement or document referred to herein or in aid of the exercise of any power granted in this Note or in any agreement or document referred to herein, (ii) enforce the payment of this Note, or (iii) enforce any other legal or equitable right of
the Holder. No right or remedy herein or in any other agreement or instrument conferred upon the holder of this Note is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be
in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. 
  
 6. Restriction on Transfer. This Note has been acquired for investment and has not been registered under the securities laws of the United States of America or any
state thereof. Accordingly, neither this Note nor any interest therein may be offered for sale, sold or transferred in the absence of registration and qualification of this Note under applicable federal and state securities laws or an opinion of
counsel of the Holder reasonably satisfactory to the Company that such registration and qualification are not required. 
  

 4 

 7. Subordination. 
  
 I.A.7.1. The Company covenants and agrees, and the Holder, by his or its acceptance hereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Section 7 the indebtedness represented by this Note (and the other Notes) and the payment of the principal of accrued interest on, and all other amounts payable in respect of this Note (and the other Notes) are hereby
expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness. 
  
 I.A.7.2. As used in this Section 7, the following capitalized terms will have the definition set forth below: 
  
 “Senior Indebtedness” means, without duplication, (i) the principal
of, and premium (if any), and unpaid interest and fees on, all present and future (a) obligations incurred by the Company and/or any of its subsidiaries (whether as borrower or guarantor) under or pursuant to any loan or credit agreement between or
among the Company and/or any of its subsidiaries and one or more banks and/or other institutional lenders (each, a “Financing Agreement”), or any agreement between or among the Company and/or any of its subsidiaries and one or more banks
and/or other institutional lenders providing for the extension, amendment renewal, refunding or refinancing of such obligations (a “Refinancing Agreement”), whether now existing or hereafter entered into or contracted, including, without
limitation, the principal balance of all loans made thereunder and interest and fees accruing with respect to such loans and (b) all other obligations, liabilities, and indebtedness incurred by the Company and/or any of its subsidiaries under or
pursuant to any Financing Agreement or Refinancing Agreement, including, without limitation, reimbursement obligations with respect to letters of credit issued pursuant to a Financing Agreement or a Refinancing Agreement (and all fees, commissions
and charges incurred in connection with the issuance and maintenance of such letters of credit) or obligations with respect to acceptances issued or overdrafts extended pursuant to a Financing Agreement or a Refinancing Agreement; (ii) obligations
of the Company and/or any of its subsidiaries under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise assure a creditor against loss in respect of, indebtedness or
obligations of others of the kind referred to in clause (i) above; (iii) indebtedness incurred by the Company and/or any subsidiaries of the Company to finance the acquisition by it of assets classified as capital assets under GAAP (“Purchase
Money Debt”); (iv) obligations of the Company and/or any of the Company Subsidiaries as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles; and (v) Acquisition
Indebtedness; in each case, (x) whether now existing or hereafter arising and whether such indebtedness or obligations arise or accrue before or after the commencement of any bankruptcy, insolvency or receivership proceedings, including, without
limitation, interest and fees accruing pre-petition or post-petition at the rate or rates prescribed in a Financing Agreement, a Refinancing Agreement, Purchase Money Debt and/or Acquisition Indebtedness/or any extension, renewal, refunding or
refinancing of any of the foregoing, and costs, expenses, and attorneys’ fees and disbursements, whenever incurred (and, whether or not such claims, interest, costs, expenses, fees or disbursements are allowed or allowable in any such
proceeding); and (y) unless the document, instrument or agreement creating or evidencing the indebtedness or obligation or pursuant to which the same is outstanding, provides (1) that such indebtedness is not superior in right of payment to the
Notes or (2) that such indebtedness or obligation shall be subordinated to any other such indebtedness or obligation, unless such indebtedness or obligation expressly provides that it shall be senior in right of payment to the Notes. 
  
 As used in the foregoing definition of “Senior Indebtedness”,
“Acquisition Indebtedness” means indebtedness of the Company and/or any of its subsidiaries payable to any entity or person in connection with an Acquisition from such entity or person, regardless of whether such indebtedness was created,
incurred or assumed by the Company and/or such subsidiary of the Company. 
  

 5 

 8. Miscellaneous 
  
 I.A.8.1. The obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission,
recoupment or adjustment whatsoever. 
  
 I.A.8.2. If, following the occurrence of
an Event of Default, the Holder of this Note shall seek to enforce the collection of any amount of the principal of and/or accrued Interest on this Note, there shall be immediately due and payable by the Company, in addition to the then unpaid
principal of, and accrued unpaid interest on, this Note, all costs and expenses incurred by such Holder in connection therewith, including, without limitation, reasonable attorneys’ fees and disbursements. 
  
 I.A.8.3. No forbearance, indulgence, delay or failure to exercise any right or remedy with
respect to this Note shall operate as a waiver or as an acquiescence in any Default, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.

  
 I.A.8.4. This Note may not be modified or discharged (other than by payment)
except by a writing duly executed by the Company and Holder. 
  
 I.A.8.5. The
headings of various sections and subsections of this Note are for convenience of reference only and shall in no way modify any of the terms or provisions of this Note. 
  

 6 

 I.A.8.6. All notices required to be given to any of the parties hereunder shall be in writing and shall be deemed to have
been sufficiently given for all purposes when presented personally to such party, sent by facsimile (with the original timely mailed), or sent by registered, certified or express mail, return receipt requested, to such party at its address set forth
below: 
  
 if to the Company, to: 
  
 Quantum-Veritek, Inc. 
 28213 Van Dyke Avenue 
 Warren, MI 48093

 Attn: Michael C. Azar, Esq., General Counsel 
 Facsimile No: (586)582-9481 
  
 if to the Payee, to: 
  
 Quantum Value Partners,
LP 
 28213 Van Dyke Avenue 
 Warren, MI 48093 
 Attn: Michael C. Azar, Esq., General Counsel 
 Facsimile No: (586) 582-9481 
  
 or hereafter given to the other party hereto pursuant to the provisions of this Note. 
  
 I.A.8.7. The Company may not delegate its obligations under this Note and such attempted delegations shall be null and void. The Holder may
assign, pledge or otherwise transfer this Note without prior written consent of the Company. This Note inures to the benefit of Payee, its successors and its assignee of this Note and binds the Company, and its successors and assigns, and the terms
“Payee” and “the Company” whenever occurring herein shall be deemed and construed to include such respective successors and assigns. 
  
 I.A.8.8. This Note shall continue to be effective or be reinstated, as the case may be, if at any time any payment made pursuant to it is rescinded or must otherwise be
returned by the Holder upon bankruptcy or reorganization or otherwise of the Company, all as though such payment had not been made. 
  
 Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Note, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Note, if mutilated, the Company will make and
deliver a new Note of like date and tenor, in lieu thereof. 
  

									
	  
 Pay to the order
of
 Comerica Bank, without recourse
	 	 	 	QUANTUM-VERITEK, INC.
	 	 	 	 	By:	 	 /s/ James Jufanitch

	 QUANTUM VALUE PARTNERS, LP
	 	 	 	 Name:
	 	 James Jufanitch

	 	 	 	 	 	 	 Title:
	 	 Pres/CEO

	 By:
	 	 QUANTUM Value Management, LLC
 its general
partner
	 	 	 	 	 	 
				
	 /s/ Michael C. Azar

	 	 	 	 	 	 
	 By:
	 	  

	 	 	 	 	 	 
	 ITS:
	 	  

	 	 	 	 	 	 

 Dated: November 3, 2003 
  

 7

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