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Exhibit 10.2
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE FEDERAL
ARBITRATION ACT AND IF THE FEDERAL ARBITRATION ACT IS INAPPLICABLE,
THE SOUTH CAROLINA UNIFORM ARBITRATION ACT, § 15-48-10, ET.
SEQ., CODE OF LAWS OF SOUTH CAROLINA (1976), AS
AMENDED.
CAROLINA FIRST BANK
REVOLVING NOTE
$10,000,000.00
Greenville, South Carolina
June 5, 2007
FOR
VALUE RECEIVED,
SPAN-AMERICA MEDICAL SYSTEMS, INC. ,
A SOUTH CAROLINA CORPORATION (“
Borrower ”),
PROMISES TO PAY TO THE ORDER OF
CAROLINA FIRST BANK, ITS
SUCCESSORS AND/OR ASSIGNS (hereinafter called the “
Lender ”),
at the office of the Lender at 104 South Main Street, Greenville,
South Carolina 29601, or at such other place as the holder may
designate in writing, on the Maturity Date (as defined in the Loan
Agreement between Borrower and Lender, dated of even date herewith
(the “
Loan Agreement ”)
in immediately available funds the principal sum of Ten Million and
no/100 Dollars ($10,000,000.00), or so much thereof as may be
advanced from time to time. Lender is hereby irrevocably authorized
by Borrower to record the amount outstanding from time to time of
the Loan (as defined in the Loan Agreement) together with the
applicable interest, and notations of payments of interest and/or
principal received by Lender in respect thereof, which recordation
shall, in the absence of manifest error, be rebuttably presumed
accurate. All advances from Lender to Borrower hereunder may be
repaid and readvanced and shall be made in accordance with and
pursuant to the terms of the Loan Agreement. Any Event of Default
under the Loan Agreement is an event of default under the terms of
this Note (the “
Note ”).
Except as expressly provided herein, all capitalized terms used in
this Note shall have the same meaning as used in the Loan
Agreement.
The
purpose of the Loan evidenced by this Note is for: (a) a one
time cash dividend not to exceed $5.00 per share plus a single
regular quarterly dividend of $0.08 per share; (b) working
capital; (c) capital expenditures; and (d) other general
corporate purposes.
Interest .
The principal amount hereof from time to time outstanding and
unpaid shall bear interest from and including the date hereof until
payment thereof in full. From the date hereof through the Maturity
Date, and subject to the provisions set forth herein for the
increase in the applicable interest rate upon the occurrence of an
Event of Default (as defined in the Loan Agreement), interest due
hereunder shall accrue at the LIBOR Rate plus the applicable margin
(the LIBOR Rate plus the applicable margin, the “Interest
Rate”) as indicated in the following pricing matrix, as
determined by the Leverage Ratio (as defined in the Loan
Agreement). The applicable margin for the initial period shall be
.85% or 85 basis points.
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Level
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Ratio
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Applicable LIBOR Rate Margin
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I
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< 1.0 to 1.0
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.85% or 85 basis points
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II
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>
1.0 to 1.0 and <1.5 to 1.0
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1.10% or 110 basis points
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III
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>
1.5 to 1.0 and
<2.0 to 1.0
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1.35% or 135 basis points
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IV
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>
2.0 to 1.0
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1.65% or 165 basis points
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Testing
shall be made as of the end of each Interest Period based upon
the Leverage Ratio for such Interest Period. Changes in the
applicable margin shall become effective as of the Rate Set
Date based upon the Leverage Ratio of the previous Interest
Period.
For
the purposes of this Note, the following terms shall
apply:
“Leverage
Ratio” shall have the meaning given to it in the Loan
Agreement.
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