EXHIBIT 10.6
REVOLVING LINE OF CREDIT PROMISSORY NOTE
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$900,000.00 U.S. Manchester, NH February 3, 1997
FOR VALUE RECEIVED, SHEPHERD SURVEILLANCE SOLUTIONS, INC., a Nevada
corporation with a principal place of business at 0 Xxxxxxxxx Xxxx, Xxxxx 0,
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000 (the "Borrower"), promises to pay, ON DEMAND, to
the order of FLEET BANK - NH, a bank organized under the laws of the State of
New Hampshire with a place of business at 0000 Xxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxxxxx 00000 (the "Bank"), at such address, or such other place or places as
the holder hereof may designate in writing from time to time hereafter, the
maximum principal sum of NINE HUNDRED THOUSAND DOLLARS ($900,000.00), or so much
thereof as may be advanced or readvanced by the Bank to the Borrower from time
to time hereafter (such amounts defined as the "Debit Balance" below), together
with interest as provided for hereinbelow, in lawful money of the United States
of America.
The Borrower's "Debit Balance" shall mean the debit balance in an account
on the books of the Bank, maintained in the form of a ledger card, computer
records or otherwise in accordance with the Bank's customary practice and
appropriate accounting procedures wherein there shall be recorded the principal
amount of all advances made by the Bank to the Borrower, all principal payments
made by the Borrower to the Bank hereunder, and all other appropriate debits and
credits.
Under the Revolving Line of Credit Loan evidenced by this Note (the "Line
of Credit"), the Bank agrees to lend to the Borrower, and the Borrower may
borrow, up to the LESSER of (a) the maximum principal sum provided for in this
Note or (b) the Borrower's Borrowing Base, all in accordance with and subject to
the terms, conditions, and limitations of this Note and the Commercial Loan
Agreement of even date entered into by and between the Borrower and the Bank, as
the same may be amended from time to time (the "Loan Agreement"). The holder of
this Note is entitled to all of the benefits and rights of the Bank under the
Loan Agreement. However, neither this reference to the Loan Agreement nor any
provision thereof shall impair the absolute and unconditional obligation of the
Borrower to pay, ON DEMAND, the principal and interest of this Note as herein
provided. Terms not otherwise defined herein shall have the meanings ascribed to
them in the Loan Agreement.
The Borrower shall make requests for advances under this Note as provided
in the Loan Agreement. The Borrower agrees that the Bank may make all advances
under this Note by direct deposit to any demand account of the Borrower with the
Bank or in such other manner as may be provided in the Loan Agreement, and that
all such advances shall represent binding obligations of the Borrower.
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The Borrower acknowledges that this Note is to evidence the Borrower's
obligation to pay its Debit Balance, plus interest and any other applicable
charges as determined from time to time pursuant to the Loan Agreement, and that
it shall continue to do so despite the occurrence of intervals when no Debit
Balance exists because the Borrower has paid the previously existing Debit
Balance in full.
Interest shall be calculated and charged daily, based on the actual
days elapsed over a three hundred sixty (360) day banking year, on the unpaid
principal balance outstanding hereunder from time to time at a variable rate
equal to the Bank's Base Rate, so called, plus one and one-half (1.5%) per
annum. The Base Rate shall be the Base Rate of the Bank as established and
changed by the Bank from time to time whether or not such rate shall be
otherwise published or Borrower is provided with notice thereof Each time the
Base Rate changes, the interest rate hereunder shall change contemporaneously
with such change in the Base Rate effective as of the opening of business on the
date of change. The Borrower acknowledges that the Base Rate is used for
reference purposes only as an index and is not necessarily the lowest interest
charged by the Bank on commercial loans.
Pending demand or an Event of Default as provided in the Loan
Agreement, the Bank shall extend the Line of Credit through and until August 15,
1997, and, if the Line of Credit is renewed and extended by the Bank pursuant to
the Loan Agreement, through and until March 15, 1998, and if then renewed,
thereafter until each anniversary of such date to which the Line of Credit is
renewed and extended (August 15, 1997, March 15, 1998, and each anniversary
thereof to which the Line of Credit is renewed and extended, being a "Review
Date"). The Borrower shall (i) make payments of principal from time to time as
provided in the Loan Agreement and (ii) make payments of interest monthly in
arrears commencing thirty (30) days from the date hereof (or on any day within
30 days of the date hereof agreed to by the Borrower and the Bank to provide for
a convenient payment date) and continuing on the same date of each month
thereafter through and until the earlier of the demand, acceleration of this
Note upon an Event of Default, or any Review Date with respect to which the Line
of Credit is not renewed by the Bank, whereupon all principal, accrued and
unpaid interest, and any other charges provided for hereunder shall be due and
payable in full. In the event that the Line of Credit is renewed pursuant to the
Loan Agreement as of any Review Date, this Note shall thereafter continue to
evidence amounts advanced and due under the Line of Credit as renewed.
This Note is being executed and delivered in accordance with the terms
of the Loan Agreement and the documents defined therein as the "Loan Documents".
The payment and performance of the obligations contained in the Loan Documents
are secured by the collateral granted to the Bank therein (the "Collateral") and
the security granted to the Bank in the Loan Documents.
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The holder may impose upon the Borrower a delinquency charge of five
percent (5%) of the amount of interest not paid on or before the tenth (10th)
day after such installment is due. The entire principal balance hereof, together
with accrued interest, shall after maturity, whether by demand, acceleration or
otherwise, bear interest at the contract rate of this Note plus an additional
five percent (5%) per annum.
The Borrower agrees that any other property upon or in which the
Borrower has granted or hereafter grants the holder a mortgage or security
interest, securing the payment and performance of any other liability of the
Borrower to the holder, shall also constitute Collateral. As additional
Collateral, the Borrower grants (1) a security interest in, or pledges, assigns
and delivers to the holder, as appropriate, all deposits, credits and other
property now or hereafter due from the holder to the Borrower; and (2) the right
to set off and apply (and a security interest in said right), from time to time
hereafter and without demand or notice of any nature, all, or any portion, of
such deposits, credits and other property, against the indebtedness evidenced by
this Note whether the other Collateral, if any, is deemed adequate or not.
The Borrower, and every maker, endorser, or guarantor of this Note,
jointly and severally, agree to pay on demand all reasonable out-of-pocket costs
of collection hereof, including reasonable attorneys' fees, whether or not any
foreclosure or other action is instituted by the holder in its discretion.
No delay or omission on the part of the holder in exercising any right,
privilege or remedy shall impair such right, privilege or remedy or be construed
as a waiver thereof or of any other right, privilege or remedy. No waiver of any
right, privilege or remedy or any amendment to this Note shall be effective
unless made in writing and signed by the holder. Under no circumstances shall an
effective waiver of any right, privilege or remedy on any one occasion
constitute or be construed as a bar to the exercise of or a waiver of such
right, privilege or remedy on any future occasion.
The acceptance by the holder hereof of any payment after any default
hereunder shall not operate to extend the time of payment of any amount then
remaining unpaid hereunder or constitute a waiver of any rights of the holder
hereof under this Note.
All rights and remedies of the holder, whether granted herein or
otherwise, shall be cumulative and may be exercised singularly or concurrently,
and the holder shall have, in addition to all other rights and remedies, the
rights and remedies of a secured party under the Uniform Commercial Code of New
Hampshire. The holder shall have no duty as to the collection or protection of
the Collateral or of any income thereon, or as to the preservation of any rights
pertaining thereto beyond the safe custody thereof and those duties imposed by
the Uniform Commercial Code of New Hampshire. Surrender of this Note, upon
payment or otherwise, shall not affect the right of the holder to retain the
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Collateral as security for the payment and performance of any other liability of
the Borrower to the holder.
The Borrower, and every maker, endorser, or guarantor of this Note,
hereby jointly waive. to the fullest extent permitted by law, presentment,
notice, protest and all other demands and notices and assents (1) to any
extension of the time of payment or any other indulgence, (2) to any
substitution, exchange or release of Collateral, and (33) to the release of any
other person primarily or secondarily liable for the obligations evidenced
hereby.
This Note and the provisions hereof shall be binding upon the Borrower
and the Borrower's heirs, administrators, executors, successors, legal
representatives and assigns and shall inure to the benefit of the holder, the
holder's heirs, administrators, executors, successors, legal representatives and
assigns.
The word "holder" as used herein shall mean the payee or endorsee of
this Note who is in possession of it, or the bearer, if this Note is at the time
payable to the bearer.
This Note may not be amended, changed or modified in any respect except
by a written document which has been executed by each party. This Note
constitutes a New Hampshire contract to be governed by the laws of such state
and to be paid and performed therein.
The provisions of this Note are expressly subject to the condition that
in no event shall the amount paid or agreed to be paid to the holder hereunder
and deemed interest under applicable law exceed the maximum rate of interest on
the unpaid principal balance hereunder allowed by applicable law, if any, (the
"Maximum Allowable Rate"), which shall mean the law in effect on the date
hereof, except that if there is a change in such law which results in a higher
Maximum Allowable Rate being applicable to this Note, then this Note shall be
governed by such amended law from and after its effective date. In the event
that fulfillment of any provisions of this Note results in the interest rate
hereunder being in excess of the Maximum Allowable Rate, the obligation to be
fulfilled shall automatically be reduced to eliminate such excess. If
notwithstanding the foregoing, the holder receives an amount which under
applicable law would. cause the interest rate hereunder to exceed the Maximum
Allowable Rate, the portion thereof which would be excessive shall automatically
be applied to and deemed a prepayment of the unpaid principal balance hereunder
and not a payment of interest.
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Executed and delivered this __ day of February, 1997.
SHEPHERD SURVEILLANCE
SOLUTIONS, INC.
/s/ By: /s/ X. Xxxxxx Xxxxxxx
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Witness X. Xxxxxx Xxxxxxx, President
