EX-10.28 2 dex1028.txt PROMISSORY NOTE Exhibit 10.28 Promissory Note --------------- 1. For value received, and pursuant to a Settlement Agreement dated February 1, 2001 attached hereto (Settlement Agreement), Moore Medical Corp., a Delaware corporation (Moore or Maker), for itself and its successors and assigns, promises to pay to the United States of America (Holder), or its assignee, the full principal sum of $ 5,200,000, together with interest accruing at the rates of 5.25% per annum through year 1, 6.50% per annum through year 2, and 7.25% per annum through years 3-5 (Outstanding Balance) as set forth below. Schedule of Payments (including interest) -----------------------------------------
Quarters Date Payment Principal Interest Balance Due 5.25% 5,200,000 Down Payment 02/7/01 500,000 500,000 4,700,000 Year one 1 04/1/01 75,000 75,000 4,625,000 2 07/1/01 106,953 5,000 101,953 4,620,000 3 10/1/01 135,638 75,000 60,638 4,545,000 4 01/1/02 134,653 75,000 59,653 4,470,000 Year one total 952,244 730,000 6.50% Year two 5 03/1/02 173,425 125,000 48,425 4,345,000 6 06/1/02 195,606 125,000 70,606 4,220,000 7 09/1/02 193,575 125,000 68,575 4,095,000 8 12/1/02 191,544 125,000 66,544 3,970,000 Year two total 754,150 500,000 7.25% Year three 9 03/1/03 271,956 200,000 71,956 3,770,000 10 06/1/03 268,331 200,000 68,331 3,570,000 11 09/1/03 264,706 200,000 64,706 3,370,000 12 12/1/03 261,081 200,000 61,081 3,170,000 Year three total 1,066,075 800,000 7.25% Year four 13 03/1/04 407,456 350,000 57,456 2,820,000 14 06/1/04 401,113 350,000 51,113 2,470,000 15 09/1/04 394,769 350,000 44,769 2,120,000 16 12/1/4 388,425 350,000 38,425 1,770,000 Year four total 1,591,763 1,400,000 7.25% Year five 17 03/1/05 432,081 400,000 32,081 1,370,000 18 06/1/05 474,831 450,000 24,831 920,000 19 09/1/05 466,675 450,000 16,675 470,000 20 12/1/05 478,519 470,000 8,519 -- Year five total 1,852,106 1,770,000 TOTAL - ALL YEARS 6,216,338 5,200,000
2. Payments will be made by wire transfer as indicated in the Settlement Agreement. If there is any change in the method or instructions of payment, the Holder shall inform the Maker at least 5 business days before payment is due. 3. This Note may be prepaid, in whole or in part, without penalty or premium. Partial payment does not alter the interest rate applicable each year as reflected in paragraph 1 of this Note. 4. Pursuant to the Settlement Agreement, the Maker procured from Fleet National Bank and shall deliver or cause to be delivered to the United States of America, Letter of Credit No. ASL-3005090-110 MMC , established in favor of the United States by Fleet National Bank (Letter of Credit). The Maker agrees, and the holder of this Note, by its acceptance hereof, likewise agrees, that, except with respect to indebtedness covered by Letter of Credit No. ASL-3005090-110 MMC issued by Fleet National Bank on February 1, 2001, the indebtedness represented by this Note, is subordinate to the Maker's indebtedness under the Loan and Security Arrangement between Fleet Capital Corporation and the Maker, dated January 26, 2001. The Holder may draw on the Letter of Credit only upon an Event of Default as defined by this Note. Maker may, with the prior written approval of the Holder, cause to be issued a substitute Letter of Credit of like terms and conditions. If the Letter of Credit expires before the entire outstanding balance due under this Note is paid, Moore shall cause to be issued a substitute Letter of Credit of like terms and conditions. 5. Maker is in default of this Note on the date of occurrence of any of the following events (Events of Default). A. Maker's failure to procure, deliver, or maintain the Letter of Credit. B. Maker's failure to pay any amount provided for in this Note within two days of when such payment is due and payable; provided, however, that an Event of Default does not occur if because of events outside of Maker's control, the Holder does not receive the paid amount after transmission by Maker. Maker will make its best efforts to insure Holder's receipt of the paid amount. C. If prior to making the full payment of the amount due under this Note, any case, proceeding, or other action is instituted; a. under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have any order for relief of debtors, or seeking to adjudicate Moore as bankrupt or insolvent; or b. seeking appointment of a receiver, trustee, custodian or other similar official for Moore or for all or any substantial part of Moore's assets. D. If, paragraph 13 of the Settlement Agreement is violated. 6. The Maker shall provide the United States written notice of an Event of Default within two (2) business days of such event by overnight mail, delivered to the Office of the United States Attorney for the District of Connecticut (USAO), at 157 Church Street New Haven, CT 06508. 7. Upon the occurrence of an Event of Default, without further notice or presentment and demand by the United States: A. The portion of the Outstanding Balance secured by the Letter of Credit shall become immediately due and payable, and the portion of the Outstanding Balance not secured by the Letter of Credit shall become due and payable after 30 days from an Event of Default not cured within 30 days (default amount). Interest shall accrue on the default amount from the date of the Event of Default at 12 per cent per annum, compounded daily. B. The United States may draw the full amount available for drawing under the Letter of Credit and retain all proceeds thereof, and the default amount shall be reduced by the amount of such draw. C. The United States retains any and all other rights and remedies it has or may have under law and equity, and may exercise those rights or remedies. D. No failure or delay on the part of the United States to exercise any right or remedy shall operate as a waiver of the United States' rights. No partial or single exercise by the United States of any right or remedy shall operate as a waiver of the United States' rights. E. Maker will pay the United States all reasonable costs of collection, including reasonable attorneys' fees and expenses. 8. Waiver by the Holder of any default by Maker, its successors, or assigns will not constitute a waiver of a subsequent default. Failure by the Holder to exercise any right, power, or privilege which it may have by reason of default will not preclude the exercise of such right, power, or privilege so long as such default remains uncured or if a subsequent default occurs. 9. This Note shall be governed and construed according to the laws of the United States of America. 10. Maker acknowledges that it is entering into this Note, freely, voluntarily and with no degree of compulsion whatsoever. 11. Moore shall provide the USAO a certified copy of a resolution of Moore's Board of Directors affirming that Moore has authority to enter into this Note, and that Moore's Board of Directors has: (1) reviewed this Note, the Letter of Credit, and the Settlement Agreement; (2) consulted with legal counsel in connection with this matter; (3) voted to authorize Moore to enter into this Note on behalf of Maker; and (4) voted to authorize the corporate officer identified below to execute this Note and to take such further steps as necessary to carry out the terms of this Note. IN WITNESS THEREOF, Maker intending to be legally bound hereby and so bind its successors and assigns, has caused this Note to be executed by its proper corporate officer and its corporate seal hereunto affixed, duly attested this 1, day of February, 2001 MOORE MEDICAL CORP. by: /s/ Linda M. Autore ------------------- LINDA M. AUTORE President and CEO February 1, 2001 Corporate Seal Corporate Acknowledgment State of Connecticut On February 1, 2001, before me personally came Linda M. Autore, to me known who, being duly sworn, did depose and state that (1) she resides in Connecticut, (2) is an officer of Moore Medical Corp. (Moore), the corporation described in and which executed the above instrument, (3) she knows the seal of Moore, (4) the seal affixed to said instrument is such corporate seal, (4) that it was so affixed by order of the Board of Directors of Moore, (5) and that she signed her name thereto by like order. /s/ Bozena Samsel ----------------- Notary Public State of Connecticut My Commission Expires: