EX-10.6
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exhibit10_6.htm
EXHIBIT 10.6
SENIOR SECURED PROMISSORY NOTE
SENIOR
SECURED PROMISSORY NOTE
February
28, 2007
Sarasota,
Florida
FOR
VALUE
RECEIVED, the undersigned, INVISA,
INC.,
a
Nevada corporation (“Borrower”)
having
an address at 0000 00xx
Xxxxxx,
Xxxxx 000, Xxxxxxxx, Xxxxxxx, 00000 promises to pay to the order of Centurian
Investors, Inc, a Delaware corporation (“Lender”),
having an office at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, or such other
place
as the Lender may designate in writing, the principal amount up to and not
to
exceed ONE HUNDRED FIFTY XXXXXXX United States Dollars (U.S. $150,000.00),
to
the extent advanced hereunder and then outstanding, with interest on the
unpaid
principal balance from the date of this
Senior Secured Promissory Note (this
“Promissory
Note”),
until
paid, at the Interest Rate (as hereinafter defined) provided herein.
1. Rate
of Interest.
The
outstanding principal balance of this Promissory Note shall bear interest
at ten
percent (10%) per annum (the “Interest
Rate”).
2. Date
and Time of Payment.
The
outstanding principal balance of this Promissory Note, together with all
accrued
and unpaid interest, shall be paid in full on earlier to occur of (a) the
Maturity Date or (b) the date of termination of this Promissory Note, whether
by
its terms, by prepayment, or by acceleration. All amounts outstanding hereunder
shall constitute Borrower’s obligations hereunder, and such obligations include
without limitation all principal, interest (including all interest which
accrues
after the commencement of any case or proceeding by or against Borrower in
bankruptcy whether or not allowed in such case or proceeding), expenses,
attorneys’ fees and any other sum chargeable to Borrower hereunder and owing to
Lender under this Promissory Note (all such obligations and all other
obligations of Borrower under this Promissory Note ,(the “Obligations”).
No
principal amount of this Note paid or prepaid may be reborrowed.
3. Default
Rate.
Notwithstanding Section
1,
after
the occurrence of any Event of Default and for so long as such Event of Default
continues, and in any event from and after the Maturity Date, all principal,
interest and other amounts payable under this Promissory Note shall bear
interest until paid in full at a rate of interest equal to four percent (4%)
above the per annum rate otherwise applicable hereunder (the “Default
Rate”).
4. Computation
of Interest.
Interest on the principal amount hereof and all other Obligations shall be
computed on the basis of a 360-day year, and shall be charged for the actual
number of days elapsed during any month
or
other accrual period.
5. Manner
of Payment.
All
payments by Borrower in respect of any Obligations shall be made without
deduction, defense, set off or counterclaim, free and clear of all taxes
delivered to Lender.
6. Maturity.
To the
extent not sooner due and payable in accordance with this Promissory Note
, the
Obigations shall be due and payable six months from the date hereof
(the
“Maturity
Date”).
7. Application
of Payments.
All
payments shall be applied to amounts then due and payable in the following
order: (a) to Xxxxxx’s costs and expenses reimbursable in connection herewith;
(b) to interest accrued on the outstanding principal balance of this Promissory
Note; (c) to the principal amount hereof; and (d) to all other Obligations,
or
in such other manner as Lender shall determine in its sole and exclusive
discretion.
8. Procedure
for Borrowing and Use of Proceeds. The
proceeds of this Promissory Note shall be funded in multiple advances (each,
an
“Advance”)
by
Lender to Borrower in the amounts and on such dates as determined by Lender
based on requests from Borrower. Borrower shall give Lender notice requesting
that Lender make an Advance in accordance herewith specifying (a) the Borrowing
Date, (b) the amount requested and (c) a detailed, itemized list of the use
of
such Advance. Upon receipt of such notice from Borrower, Lender shall determine,
in its sole and exclusive discretion, whether it shall make such amount
available to Borrower on the Borrowing Date. Upon each Advance, Xxxxxx shall
record each Advance on Schedule I to this Promissory Note. For purposes of
this
Section 8, the Borrowing Date shall mean any business day specified in the
notice pursuant to this Section 8 as a date on which Borrower requests Xxxxxx
to
make a loan hereunder. An initial Advance of FORTY FIVE THOUSAND DOLLARS
($45,000) shall be made simulateously with the execution of this Promissory
Note. The obligation of Lender to make each subsequent Advance following
the initial Advance hereunder
is subject to the Lenders approval of the loan request made by Borrower in
accordance with this Section 8 and shall be funded in the sole and exclusive
discretion of Lender.
9. Security.
This
Promissory Note shall be secured by (i) Twenty Million (20,000,000) shares
of
common stock of Borrower to be issued as of the date hereof and held in escrow
and a continuing first priority security interest in all of Borrower’s right,
title, and interest in and to, all property of Borrower (collectively, the
“Collateral”),
as
more specifically set forth in the Security Agreement executed by Borrower
in
favor of Lender as of the date hereof, in substantially the form attached
hereto
as Exhibit A (the “Security Agreement”).
Priority This
Promissory Note shall be a senior obligation of Borrower, and for so long
as
this Promissory Note shall be outstanding, (i) Borrower shall be prohibited
from
incurring any and all future indebtedness without the prior written consent
of
Lender and (ii) any and all future indebtedness approved by Borrower in writing
shall be deemed subordinate and inferior to, all respective right, title
and
interest of Lender, in, to and under this Promissory Note, this Security
Agreement and any and all documents and instruments evidencing, securing
or
otherwise relating to this Promissory Note.
10. Representations
and Warranties.
Borrower
makes the following representations and warranties to Lender, which
representations and warranties shall be true, correct, and complete as of
the
date hereof and shall survive the execution and delivery of this Promissory
Note.
(a) Due
Organization and Qualification.
Borrower is duly organized and validly existing and in good standing under
the
laws of the jurisdiction of its organization and qualified to do business
in any
jurisdiction where it is required to be so qualified, and has all requisite
power and authority to (i) own its assets and carry on its business, and
(ii)
execute, deliver and perform its Obligations.
(b) Due
Authorization; No Conflict.
The
execution, delivery, and performance by Borrower of this Promissory Note
has
been duly authorized by all necessary action on the part of Borrower. This
Promissory Note has been duly executed and delivered by Xxxxxxxx. The execution,
delivery, and performance by Borrower of this Promissory Note and the
consummation of the transactions contemplated hereby, do not and will not
(i)
violate in any material respect any provision of federal, state, provincial
or
local law or regulation applicable to Borrower, its organizational documents,
or
any order, judgment, or decree of any court or other governmental authority,
(ii) conflict with, result in a breach or termination of, or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation of Borrower, (iii) result in or require the creation or imposition
of
any lien of any nature whatsoever upon any properties or assets of Borrower,
other than liens or security interests in favor of Lender, or (iv) require
any
approval of any of Borrower’s stockholders or any approval or consent of any
other person or entity, other than consents or approvals that have been obtained
and that are still in force and effect. The execution, delivery, and performance
by Borrower of this Promissory Note do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by,
any
governmental authority, other than consents or approvals that have been obtained
and that are still in force and effect. This Promissory Note when executed
and
delivered by Borrower will be the legally valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its term, except
as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally.
(c) No
Litigation.
No
litigation, investigation or proceeding of or before any arbitrator or
government authority is (i) pending or, to the knowledge of Borrower, threatened
with respect to this Promissory Note or the Collateral or any of the
transactions contemplated hereby or (ii) pending or, to the knowledge of
Borrower, threatened by or against Borrower, its properties or revenues which,
if adversely determined, would have a material adverse effect on its business,
operations, property or financial condition, when taken as a whole.
(d) No
Default.
Borrower is not in default under or with respect to any contractual obligation
and no event of default has occurred or is continuing with respect to
Borrower.
(e) Taxes.
Borrower
has filed or caused to be filed all tax returns required to be filed by it
and
has paid all taxes due and payable on said returns or on any assessments
made
against Borrower or any of its property. All other taxes, fees or other charges
on Borrower or any of its property by any governmental authority have been
paid
and no tax liens have been filed.
12.
Covenants
of Borrower. As
of the
date hereof and so long as the Obligations hereunder shall be
outstanding:
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(a)
Borrower will
preserve and keep in force and effect, its corporate existence and all licenses
and permits necessary to the proper conduct of its business;
(b)
Borrower will promptly pay and discharge, all lawful taxes, assessments,
charges
or levies imposed upon Borrower, or upon or in respect of all or any part
of the
property or business of Borrower, all trade accounts payable in accordance
with
usual and customary business terms and all claims for work, labor or materials,
which if unpaid might become a lien or charge upon any property of Borrower;
provided,
Borrower shall not be required to pay such tax, assessment, charge, levy,
account payable or claim if (i) the validity, applicability or amount thereof
is
being contested in good faith by appropriate action or proceeding which will
prevent the forfeiture or sale of any property of Borrower, and (ii) Borrower
shall set aside on its books, reserves deemed by it to be adequate with respect
thereto;
(c)
Borrower will promptly comply with all laws, ordinances or governmental rules
and regulation to which it is subject, the violations of which would materially
or adversely affect its properties, business, prospects, profits or condition
or
would result in any material lien or charge upon any property of
Borrower;
(d)
Borrower will maintain, preserve and keep its properties which are used or
useful in the conduct of its business in good repair and working order;
(e)
Borrower will not create, assume or incur or in any manner become liable
with
respect of any indebtedness except this Promissory Note and any indebtedness
of
Borrower incurred prior to the date hereof.
(f)
Borrower will not create or incur any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (a “Lien”) on its or its property or
assets, whether now owned or hereinafter acquired, or upon any income or
profits
therefrom except
(i) Liens
for
property taxes and assessments or levies and liens that are not yet due and
payable;
(ii) Liens
of
or resulting from any judgment or award, the time for appeal or petition
for
rehearing of which shall not have expired or in respect of which the Company
shall in good faith be prosecuting an appeal or proceeding for a review and
in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured; or
(iii) Liens
or
priority claims (A) incidental to the conduct of business, (B) created by
any
material agreement of Borrower entered into prior to and currently in effect
as
of the date hereof or (C) the ownership or lease of properties and assets
and
not in connection with the borrowing of money, provided,
in each
case, the obligation secured is not overdue, or if overdue, is being contested
in good faith by appropriate actions or proceedings and provided,
further
that
Borrower shall have received the prior written consent of Lender to any Lien
described in (A) or (C) above; or
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13. Events
of Default; Remedies; Acceleration.
(a) The
occurrence of any one or more of the following events (regardless of the
reason
therefor) shall constitute an “Event
of Default”
hereunder:
(i)
Borrower fails to make any payment of outstanding principal balance of this
Promissory Note , or interest thereon, or any of the other Obligation when
due
and payable; ,
(ii)
Any
representation or warranty of Borrower made in this Promissory Note, the
Security Agreeent, or any other document made by or on behalf of Borrower
in
connection herewith and the transactions contemplated hereby proves to have
been
false or incorrect in any material respect or Borrower shall fail to comply
in
all respects with any covenant herein or therein;
(iii)
Borrower shall violate any provision of this Promissory Note, the Security
Agreement or any other document made by or on behalf of Borrower in connection
herewith and the transactions contemplated hereby, including, without
limitiation, failure to comply with the terms and provisions of Section 8
of
this Promissory Note;
(iv)
A
case or proceeding is commenced against Borrower seeking a decree or order
(i)
under Title 11 of the United States Bankruptcy Code (11 U.S.C. §§101
et
seq.,
as
amended, and any successor statute, the “Bankruptcy
Code”),
or
any other applicable federal, state or foreign bankruptcy or other similar
law,
rule or regulation, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for Borrower or for any
substantial part of Borrower’s assets, or (iii) ordering the winding-up or
liquidation of the affairs of s Borrower, and such case or proceeding shall
remain undismissed or unstayed for sixty (60) days or more or a decree or
order
granting the relief sought in such case or proceeding shall be entered by
a
court of competent jurisdiction;
(v)
Borrower, without the prior written consent of Lender (A) files a petition
seeking relief under the Bankruptcy Code, or any other applicable federal,
state
or foreign bankruptcy or other similar law, rule or regulation, (B) consents
to
or fails to contest in a timely and appropriate manner the institution of
proceedings thereunder or the filing of any such petition or the appointment
of
or taking possession by a custodian, receiver, liquidator, assignee, trustee
or
sequestrator (or similar official) for Borrower or for any substantial part
of
Borrower’s assets, (C) makes an assignment for the benefit of creditors, (D)
takes any action in furtherance of any of the foregoing; or (E) admits in
writing its inability to, or is generally unable to, pay its debts as such
debts
become due;
(vi)
If
this Promissory Note, the Security Agreement, or any financing statement,
document or other instrument executed, delivered or filed in connection herewith
or with the security interest granted to Lender hereunder, shall, for any
reason, fail or cease to create a valid and perfected lien on or security
interest in any or all of the Collateral or the Collateral shall be compromised,
encumbered or, in the case of the common stock, invalid, cancelled or otherwise
rescinded;
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(vi)
If
Borrower shall default on any material obligations of Borrower or an event
of
default shall occur with respect to any material agreement of Borrower, whether
such agreement shall be in effect or effective subsequent to this Promissory
Note.
(b)
Immediately upon
the
occurrence of any Event of Default, all
of
the Obligations of Borrower hereunder shall become immediately due and payable
to Lender and the Obligations shall thereafter accrue interest at the Default
Rate from the date of any Event of Default until such Obligations are paid
in
full (an “Accelleration”). Promptly upon the occurrence of an Acceleration,
Lender shall send Borrower written notice of the date upon which the
Acceleration is effective and the names of two (2) representatives of Lender
(“Lender Nominees”) to be immediately appointed to the Board of Directors of
Borrower (the “Default Notice”). The Lender Nominees shall be appointed to the
Board of Directors of Borrower not less than five days following the date
of the
Default Notice. Except with respect to an Event of Default under Section
13(a)(iv) and (v), Borrower shall have forty five (45) days (the forty fifth
day
hereinafter being the “Final Payment Date”) from the date of the Default Notice
to pay Lender the total amount of the Obligations due and owning under this
Promissory Note. In the event that Borrower shall fail to satisfy in full
all of
the outstanding Obligations under this Promissory Note on or before the Final
Payment Date, then Lender
may (i) proceed to protect and enforce Lender’s
rights
by suit in equity, action at law and/or other appropriate proceeding, either
for
specific performance of any covenant or condition contained in this Promissory
Note, the Security Agreement, or in any instrument or document delivered
to
Lender pursuant to this Promissory Note , or in aid of the exercise of any
power
granted in this Promissory Note or any such instrument or document, and (ii)
proceed to enforce payment of the Obligations in such manner as Lender may
elect,
including the foreclosure of the Collateral in accordance with the terms
of the
Security Agreement,
and to
realize upon any and all rights of Lender hereunder. Upon the occurrence
of any
Event of Default under Section 13(a)(iv) and (v), Lender shall have a right
to
immediately enforce its rights hereunder and proceed against or foreclose
upon
the Collateral without regard to the 45 day period set forth in this Section
13(b) To the extent not prohibited by applicable law which cannot
be
waived, all of Xxxxxx’s rights hereunder shall be cumulative. Lender shall have
all other rights and remedies not inconsistent herewith as provided under
applicable law or in equity, and no exercise by Lender of one right or remedy
shall be deemed an election, and no waiver by Lender of any Event of Default
shall be deemed a continuing waiver. No delay by Xxxxxx shall constitute
a
waiver, election or acquiescence by it.
(c)
In
the event that the Obligations hereunder shall be paid in full by or on behalf
of Xxxxxxxx, after the Acceleration of this Promissory Note but prior to
the
Final Payment Date, then this Promissory Note shall be deemed paid in full,
Lender shall promptly release any lien of Lender on the Collateral, and each
Lender Nominee shall immediately resign from the Board of Directors of Borrower.
14.
Certain Rights
and Waivers.
To the
extent not prohibited by the provisions of applicable law, Borrower hereby
expressly waives: (a) all presentments, demands for performance, notices
of
nonperformance (except to the extent required by this Note), protests, notices
of protest and notices of dishonor; (b) any requirement of diligence or
promptness on the part of Lender in the enforcement of its rights under this
Note; (c) any and all notices of every kind and description which may be
required to be given by any statute or rule of law; and (d) any
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defense
(other than indefeasible payment in full) which it may now or hereafter have
with respect to its liability under this Note.
15. Assignments.
Borrower may not assign or transfer any of its rights or obligations hereunder
without the express, written consent of Xxxxxx. Any such purported assignment
or
transfer by Borrower without the express, written consent of Lender shall
be
null and void ab
initio.
16. Costs
and Expenses.
Borrower agrees to pay all costs and expenses of Lender, including without
limitation all fees and disbursements of counsel, advisors, consultants,
examiners and appraisers for Lender, in connection with (a) the issuance
of this
Promissory Note and advancement of principal amount hereunder (which fees
and
disbursements associated with the origination of this Promissory Note shall
not
exceed $3,500.00), (b) any enforcement (whether through negotiations, legal
process or otherwise) of this Promissory Note, (c) any workout or restructuring
of this Promissory Note during the pendency of one or more Events of Default,
(d) any bankruptcy case or proceeding of Borrower or any appeal thereof,
and (e)
upon the occurrence and during the continuance of an Event of Default, any
efforts to verify, protect, evaluate, assess, appraise, collect, sell, liquidate
or otherwise dispose of any of the Collateral.
17.
CHOICE OF LAW. THE
VALIDITY OF THIS NOTE, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF,
AND THE RIGHTS OF THE BORROWER AND XXXXXX WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
FLORIDA, WITHOUT
REFERENCE TO CONFLICTS OF LAW PRINCIPLES EXCEPT TO THE EXTENT NECESSARY TO
ENFORCE THIS CHOICE OF LAW PROVISION.
18.
Notices.
All
communications hereunder shall be in writing and shall be deemed to be duly
given and received (a) upon delivery if delivered personally or upon confirmed
transmittal if by facsimile, (b) on the next Business Day if
sent
by overnight courier, or (c) four (4) Business Days after mailing if mailed
by
prepaid registered mail, return receipt requested, in each case to the
appropriate notice address or facsimile number.
19.
Independent
Arms Length Transaction.
It is
understood and agreed that this Promissory Note, the Security Agreement and
the
transactions contemplated hereby and thereby were negotiated in an arms length
transacton separate and distinct from any other transaction or contractual
obligations and are independent of any transaction or transactions between
Borrower, on the one hand, and Lender and any of its affilates or related
entitles on the other hand. Xxxxxxxx further agrees that the contractual
obligations of Borrower hereunder are in no way dependent or conditioned
upon
any other agreements, contracts or transactions whatsoever unless expressly
stated herein.
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IN
WITNESS WHEREOF, the undersigned has executed this Promissory Note as of
the
date first written above.
| |
INVISA,
INC.
By:
/s/ Xxxxxx X.
Xxxx
Name:
Xxxxxx
X. Xxxx
Title:
Chief
Financial Officer
|
| | |
Signature
page to
Senior Secured Promissory Note, dated February 28,
2007
