REVOLVING CREDIT NOTE
|
Up
to $5,000,000
|
Ridgefield,
CT
|
|
As
of July 15, 2006
|
FOR
VALUE
RECEIVED, the undersigned, PETALS DECORATIVE ACCENTS, INC., a Delaware
corporation with its principal offices and place of business at 00 Xxxxx Xxxxxx,
Xxxxxxxxxx XX, 00000
(the
"Borrower"),
promises to pay, upon demand, to the order of Southshore
Capital Fund Ltd.,
a
Cayman Island Corporation (the "Lender"), or at such other place as may be
designated from time to time by the Lender, the unpaid amount of all sums that
have been advanced to or for the benefit of the Borrower in accordance with
the
terms hereof, as evidenced on the attached Grid Schedule, not to exceed the
aggregate principal sum of five million dollars ($5,000,000), lawful money
of
the United States of America, plus interest on the unpaid principal balance
computed as set forth below. Unless otherwise stated herein, capitalized terms
shall have the meanings as set forth in that certain Loan and Security Agreement
dated as of the date hereof, by and between Lender and Borrower (the
"Agreement").
This
Note
and the Loans evidenced by it shall bear interest at the rate equal to five
(5%)
percent per year, on the basis of a 360-day year and actual number of days
elapsed. Accrued interest shall be payable quarterly in arrears by the Borrower
within ten calendar (10) days from the end of each calendar quarter.
There
shall be no prepayment premium in the event the Borrower prepays any principal
or accrued interest thereon.
Mandatory
Repayment. Unless waived by the Lender, if at any time the Company closes on
a
Qualified Financing (as described below), the Company shall be required at
the
time of such closing to redeem in cash the then outstanding principal balance
plus accrued and unpaid interest on this Revolving Credit Note. A “Qualified
Financing” shall mean (1) the issuance of any debt or equity securities (in any
combination) by the Company in one or more related transactions in exchange
for
cash consideration of at least $15,000,000 dollars, (2) a sale or transfer
of
all or substantially all of the assets of the Company to another person, or
(3)
a transaction that results in a change in control of the Company.
The
Borrower hereby requests, authorizes and empowers any officer or employee or
agent of the Lender who may be directed by the Lender from time to time to
make
notations of Advances, payments and resulting outstanding balances on the Grid
Schedule attached to this Revolving Credit Note and on additional Grid Schedule
sheets as may be used by the Lender from time to time, and agrees to be bound
by
and to be liable to the Lender for repayment of the outstanding principal
balances as shown in good faith to be due and owing on such Grid Schedule sheets
from time to time, plus accrued interest thereon. Said Grid Schedule is
incorporated herein and made a part of this Revolving Credit Note.
Notwithstanding the foregoing, the Lender or the Borrower may establish, by
extrinsic evidence, that the outstanding balance of the Note is greater or
less
than the amount shown on the Grid.
This
Revolving Credit Note evidences the Loans, as each are described in and referred
to in the Agreement, and is governed by and entitled to the benefits contained
in the Agreement and is secured by the security interests granted therein,
which, among other things, contain provisions for acceleration of the maturity
hereof upon the occurrence of certain events.
Upon
the
occurrence of one or more Events of Default as provided in the Agreement, the
entire disbursed and unpaid principal, and the interest thereon shall, subject
to any applicable cure periods, become immediately due and payable without
presentment or protest or other notice or demand, all of which are expressly
waived by the Borrower.
The
powers and remedies given hereby shall not be exclusive of any other powers
and
remedies available to the Lender. No course of dealings between the Borrower
and
the Lender and no delay on the part of the Lender in exercising any rights
with
respect to any default shall operate as a waiver of any rights of the Lender.
Failure on the part of the Lender of exercise any rights with respect to any
default shall not operate as a waiver of any rights with respect to any other
default.
The
Borrower agrees to pay all costs and expenses incurred by the Lender in
enforcing this Revolving Credit Note, including, without limitation, reasonable
attorneys' fees and legal expenses.
Notwithstanding
any provision to the contrary contained herein, it is expressly understood
and
agreed between the Lender and the Borrower that the Lender shall not collect
a
rate of interest on any obligation or liability due and owing by the Borrower
to
the Lender in excess of the maximum contract rate of interest permitted by
law.
It is the intent of the Lender and the Borrower that the interest laws adopted
by the State of Connecticut shall govern the relationship between the parties
hereto, but in the event of a final adjudication to the contrary, the Borrower,
nunc
pro tunc,
shall
be obligated to pay to the Lender only such interest as then shall be permitted
by the law of the jurisdiction found to govern the contract relationship between
the Borrower and the Lender. All interest found in excess of that rate of
interest allowed and collected by the Lender shall be applied to the balance
of
the principal due hereunder in such manner as to prevent the payment and
collection of interest in excess of the rate permitted under applicable
law.
This
Revolving Credit Note may not be waived, changed, modified or discharged orally,
but only by agreement in writing signed by the party against whom any
enforcement of any waiver, change modification or discharge is
sought.
-2-
THIS
REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAWS OF THE STATE OF CONNECTICUT APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN THE STATE OF CONNECTICUT. BORROWER HEREBY WAIVES THE
RIGHT TO A JURY TRIAL AND CONSENTS TO THE EXCLUSIVE JURISDICTION IN THE FEDERAL
OR STATE COURTS OF THE STATE OF CONNECTICUT WITH RESPECT TO THE ENFORCEMENT
OF
THE TERMS HEREOF AND THE COLLECTION OF THE OBLIGATIONS
HEREUNDER.
IN
WITNESS WHEREOF, the Borrower has duly executed this Revolving Credit Note
the
day and year first above written.
| |
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
-3-
|
GRID
SCHEDULE
|
|||||
|
Date
of Transaction
|
Amount
of Loan
|
Principal
Payments
|
Interest
Payments
|
Unpaid
Principal Balance
|
Person
Making Notation
|
|
8/01/06
|
$500,000
|
$500,000
|
|||
|
8/11/06
|
$315,000
|
$315,000
|
|||
|
8/28/06
|
$360,000
|
$360,000
|
|||
|
9/08/06
|
$50,000
|
$50,000
|
|||
|
9/14/06
|
$500,000
|
$500,000
|
|||
|
9/28/06
|
$200,000
|
$200,000
|
|||
|
10/12/06
|
$223,908
|
$223,908
|
|||
|
10/24/06
|
$400,000
|
$400,000
|
|||
-4-
