Contract
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO NEWMARKET TECHNOLOGY,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS
NOTE IS REGISTERED WITH THE PARENT PURSUANT TO SECTION 24(B) OF THE SECURITY
AGREEMENT. TRANSFER OF ALL OR ANY PORTION OF THIS NOTE IS PERMITTED
SUBJECT TO THE PROVISIONS SET FORTH IN SUCH SECTION 24(B) WHICH REQUIRE, AMONG
OTHER THINGS, THAT NO TRANSFER IS EFFECTIVE UNTIL THE TRANSFEREE IS REFLECTED
AS
SUCH ON THE REGISTRY MAINTAINED WITH THE AGENT PURSUANT TO SUCH SECTION
24(B).
SECURED
REVOLVING NOTE
FOR
VALUE
RECEIVED, each of NEWMARKET TECHOLOGY, INC., a Nevada corporation (the
“Parent”), and the other companies listed on Exhibit A attached
hereto (such other companies together with the Parent, each a “Company”
and collectively, the “Companies”), hereby, jointly and severally,
promises to pay to VALENS U.S. SPV I, LLC (the “Holder”) or its
registered assigns or successors in interest, the sum of Three Million Dollars
($3,000,000), or, if different, the aggregate principal amount of all Loans
(as
defined in the Security Agreement referred to below), together with any accrued
and unpaid interest hereon, on November 30, 2010 (the “Maturity Date”) if
not sooner indefeasibly paid in full.
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Security Agreement dated as of the date hereof (as amended,
restated, modified and/or supplemented from time to time, the “Security
Agreement”) among the Companies, the Holder, each other Lender and LV
Administrative Services, Inc., as administrative and collateral agent for the
Lender (the “Agent” together with the Lenders, collectively, the
“Creditor Parties”).
The
following terms shall apply to this Secured Revolving Note (this
“Note”):
ARTICLE
I
CONTRACT
RATE
1.1 Contract
Rate. Subject to Sections 2.2 and 3.9, interest payable on the
outstanding principal amount of this Note (the “Principal Amount”) shall
accrue at a rate per annum equal to the “prime rate” published in The Wall
Street Journal from time to time (the “Prime Rate”), plus two percent
(2%) (the “Contract Rate”). The Contract Rate shall be
increased or decreased as the case may be for each increase or decrease in
the
Prime Rate in an amount equal to such increase or decrease in the Prime Rate;
each change to be effective as of the day of the change in the Prime
Rate. The Contract Rate shall not at any time be less than nine
percent (9%). Interest shall be (i) calculated on the basis of a 360
day year, and (ii) payable monthly, in arrears, commencing on December 1, 2007
on the first Business Day of each consecutive calendar month thereafter through
and including the Maturity Date, and on the Maturity Date, whether by
acceleration or otherwise.
1.2 Contract
Rate Payments. The Contract Rate shall be calculated on the last
Business Day of each calendar month hereafter (other than for increases or
decreases in the Prime Rate which shall be calculated and become effective
in
accordance with the terms of Section 1.1) until the Maturity Date and shall
be
subject to adjustment as set forth herein.
1.3 Mandatory
Prepayments. Upon receipt by any Company of any principal payment
made to such Company in respect of any Note Receivable, such Company shall
immediately apply an amount equal to fifty percent (50%) of such payment to
prepay the outstanding principal balance of the Notes, to be applied first
against the last maturing installments of the outstanding principal amount
of
the Term Loan in the inverse order thereof (including any accrued and unpaid
interest thereon) until the Term Loan is paid in full and then to the Revolving
Loans (including any accrued and unpaid interest thereon); provided,
however, following the occurrence and during the continuance of an
Event
of Default, such prepayments shall be applied to the Obligations in such order
as the Agent may elect in its sole discretion. If more than one Note
is outstanding, the proceeds payable under this Section 1.3 shall be applied
to
the Notes on a pro rata basis.
ARTICLE
II
EVENTS
OF DEFAULT AND DEFAULT RELATED PROVISIONS
2.1 Events
of Default. The occurrence of any Event of Default under the
Security Agreement shall constitute an event of default (“Event of
Default”) hereunder.
2.2 Default
Interest. Following the occurrence and during the continuance of
an Event of Default, the Companies shall, jointly and severally, pay additional
interest on the outstanding principal balance of this Note in an amount equal
to
one percent (1%) per month, and all outstanding Obligations, including unpaid
interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such Event
of Default is cured or waived.
2.3 Default
Payment. Following the occurrence and during the
continuance of an Event of Default, the Agent may demand repayment in full
of
all obligations and liabilities owing by the Companies to the Holder under
this
Note, the Security Agreement and/or any other Ancillary Agreement and/or may
elect, in addition to all rights and remedies of the Agent under the Security
Agreement and the other Ancillary Agreements and all obligations and liabilities
of each Company under the Security Agreement and the other Ancillary Agreements,
to require the Companies, jointly and severally, to make a Default Payment
(“Default Payment”). The Default Payment shall be one hundred
fifteen percent (115%) of the outstanding principal amount of this Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all
other
amounts payable hereunder, under the Security Agreement or any other Ancillary
Agreement. The Default Payment shall be due and payable immediately
on the date that the Agent has demanded payment of the Default Payment pursuant
to this Section 2.3.
ARTICLE
III
MISCELLANEOUS
3.1 Cumulative
Remedies. The remedies under this Note shall be
cumulative.
3.2 Failure
or Indulgence Not Waiver. No failure or delay on the part of the
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or
of
any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
2
3.3 Notices. Any
notice herein required or permitted to be given shall be given in writing in
accordance with the terms of the Security Agreement.
3.4 Amendment
Provision. The term “Note” and all references thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may
be
amended or supplemented.
3.5 Assignability. This
Note shall be binding upon each Company and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and assigns, and
may
be assigned by the Holder in accordance with the requirements of the Security
Agreement. No Company may assign any of its obligations under this
Note without the prior written consent of the Holder, any such purported
assignment without such consent being null and void.
3.6 Cost
of Collection. In case of the occurrence of an Event of Default
under this Note, the Companies shall, jointly and severally, pay the Holder
the
Holder’s reasonable costs of collection, including reasonable attorneys’
fees.
3.7 Governing
Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS
NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF
LAW.
(b) EACH
COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND,
AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE, THE SECURITY
AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING
OUT
OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY
AGREEMENTS; PROVIDED, THAT, EACH COMPANY ACKNOWLEDGES THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
THE
COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHERPROVIDED,
THAT, NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE
HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF
THE HOLDER. EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE
BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE PARENT AT THE ADDRESS SET FORTH
IN
THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE PARENT’S ACTUAL RECEIPT THEREOF.
3
(c) EACH
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVES
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE
HOLDER, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE,
THE
SECURITY AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED
HERETO OR THERETO.
3.8 Severability. In
the event that any provision of this Note is invalid or unenforceable under
any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this
Note.
3.9 Maximum
Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of
the
maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
rate
permitted by such law, any payments in excess of such maximum rate shall be
credited against amounts owed by the Companies to the Holder and thus refunded
to the Companies.
3.10 Security
Interest. The Agent, for the ratable benefit of the Creditor
Parties, has been granted a security interest in certain assets of the Companies
as more fully described in the Security Agreement and the Ancillary
Agreements.
3.11 Construction;
Counterparts. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that
the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any
party
against the other. This Note may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all
of
which when taken together shall constitute one and the same
instrument. Any signature delivered by a party by facsimile or
electronic transmission shall be deemed to be an original signature
hereto.
3.12 Registered
Obligation. This Note shall be registered (and such registration shall
thereafter be maintained) as set forth in Section 24(b) of the Security
Agreement. Notwithstanding any document, instrument or agreement
relating to this Note to the contrary, transfer of this Note (or the right
to
any payments of principal or stated interest thereunder) may only be effected
by
(i) surrender of this Note and either the reissuance by the Companies of this
Note to the new holder or the issuance by the Companies of a new instrument
to
the new holder or (ii) registration of such holder as an assignee in accordance
with Section 24(b) of the Security Agreement.
[Balance
of page intentionally left blank; signature page follows]
4
IN
WITNESS WHEREOF, each Company has caused this Secured Revolving Note to
be signed in its name effective as of this 30 day of November,
2007.
|
WITNESS:
|
NEWMARKET
TECHNOLOGY, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
CEO
|
|
WITNESS:
|
IP
GLOBAL VOICE, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
CHINA, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
INTELLECTUAL PROPERTY, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
|
WITNESS:
|
NETSCO,
INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
|
WITNESS:
|
NEWMARKET
BROADBAND, INC.
|
|
By:_____________________________
|
By:/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President
|
5
EXHIBIT
A
OTHER
COMPANIES
IP
Global
Voice, Inc., a Delaware corporation
NewMarket
China, Inc., a Nevada corporation
Netsco,
Inc., a North Carolina corporation
NewMarket
Intellectual Property, Inc., a Nevada corporation
NewMarket
Broadband, Inc., a Nevada corporation
