EXHIBIT 10.2
PROMISSORY NOTE
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$5,000,000.00
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May 10, 2005
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Term: July 31, 2005
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Nashua, New Hampshire
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FOR VALUE RECEIVED, on or before the
Maturity Date, Micronetics, Inc. , a Delaware corporation
with an address of 26 Hampshire Drive, Hudson, New Hampshire 03051
(the “Maker”), promises to pay to Banknorth,
N.A. , a national banking association (the
“Lender”), or to its order, at its place of business at
300 Franklin Street, Manchester, New Hampshire and a mailing
address of P.O. Box 600, Manchester, New Hampshire Five Million and
No/100ths Dollars ($5,000,000.00), together with interest in
arrears on the unpaid principal balance from time to time
outstanding and on all outstanding interest not paid when due, from
the date hereof, until the entire principal amount due hereunder is
paid in full, at the Adjustable Rate (as hereinafter defined).
Interest shall be payable monthly, commencing one (1) month from
the date hereof, and on the same day of each month thereafter (or
on the last day of the month if such day does not exist in a
particular month), or the next business day thereafter if such day
is not a business day, and continuing monthly thereafter until this
Note is paid in full. In each case, interest shall be calculated on
the basis of the actual number of days elapsed over a year of 360
days.
Commencing on the date hereof,
interest shall be charged at the Adjustable Rate.
As used herein, the following terms
shall have the meanings set forth below:
“Adjustable Rate” shall
mean an adjustable annual rate equal to two and one quarter percent
(2.25%) above the One Month LIBOR (London Interbank Offering Rate).
Such adjustments shall become effective on the first day of each
month. Lender shall not be required to notify Borrower of
adjustments in said interest rate.
“One Month LIBOR” means
the rate for deposits in U.S. Dollars for a period equal to one
month, as such rate appears on Telerate Page 3750 as of 11:00 AM,
London time, on the day that is two business days prior to the
adjustment date. If such rate does not appear on Telerate Page
3750, the rate for that adjustment date will be the arithmetic mean
of the rates quoted by major banks in London, selected by the
Lender, for a period equal to one month, as of 11:00 AM, London
time, on the day that is two business days prior to the adjustment
date.
“Telerate Page 3750”
means the display designated as “Page 3750” on the Dow
Jones Telerate Service (or such other page as may replace Page 3750
on that service or such other service as may be nominated by the
British Bankers’ Association as the information vendor for
the purpose of displaying British Bankers’ Association
Interest Settlement Rates for U.S. Dollar Deposits).
“Maturity Date” shall
mean July 31, 2005.
Page 1 of 3
So long as no Event of Default (as
hereinafter defined) shall occur, in which event the Lender may
elect to accelerate the maturity hereof, the principal balance of
this Note together with any unpaid interest thereon, shall be due
and payable as follows:
a. Commencing one (1) month from the
date hereof and on the same day of each month t
