REVOLVING BRIDGE NOTE (the "Note")
Exhibit
10.09
(the
"Note")
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$5,000,000.00
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Effective
Date: August _____,
2007
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FOR
VALUE RECEIVED, the undersigned
borrower, DEER VALLEY HOMEBUILDERS, INC., an
Alabama corporation (the "Borrower") promises to pay to the order of
FIFTH THIRD BANK, a Michigan banking corporation (the
"Lender"), at 000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xxxxx, Xxxxxxx 00000, or at
such other place as Lender may from time to time designate in writing, with
payment due as provided herein and in the Revolving Bridge Loan and Security
Agreement of even date herewith (the "Credit Agreement"), the principal sum
not
to exceed $5,000,000.00, or so much thereof as has been disbursed for advances
hereunder.
The
Interest Rate shall be a variable
rate at 250 basis points (2.50%) above the One-Month "LIBOR-Index Rate", and
shall be adjusted every month on each Interest Rate Determination Date with
all
such interest rate terms defined as set forth in "ADDENDUM A"
attached hereto and made a part hereof.
Principal
and interest shall be due and
payable as follows:
(a) To
the extent accrued, interest only, as stated above, shall be payable monthly
commencing September 1, 2007, and continuing on the same day of each month
thereafter on the principal outstanding from time to time until the loan
maturity date at which time the outstanding indebtedness, whether principal,
accrued interest or otherwise, shall be due and payable in full.
(b) The
principal amount evidenced hereby may be borrowed (and to the extent any
principal amount advanced hereunder is repaid by Xxxxxxxx, such sum may be
borrowed again) until this Note is terminated. At no time, however,
shall the principal balance outstanding hereunder exceed
$5,000,000.00.
If
any payment on this Note becomes due
and payable on a Saturday, Sunday or legal holiday under the laws of the State
of Florida, the maturity thereof shall be extended to the next succeeding
business day and interest thereon shall be payable at contract rate of interest
during such extension. All payments received by Lender after 2:00
p.m. (Eastern Standard Time) shall be credited to or for Xxxxxxxx’s account on
the next business day.
As
provided in the Credit Agreement,
the Note is to be utilized by Borrower on a revolving credit basis for working
capital requirements of Borrower in connection with the fulfillment by Borrower
of one or more contracts between Borrower and the State of Mississippi Emergency
Management Agency under the “Mississippi Alternative Housing Pilot
Program.”
This
Loan facility matures six (6)
months from the date hereof. Upon the occurrence of any one or more
of the Events of Default specified in the Credit Agreement or in any other
document or instrument delivered in connection therewith and following notice
and the expiration of all cure periods (if any), all amounts then remaining
unpaid on this Note may be declared to be immediately due and
payable. Advances under this Note shall be requested by Xxxxxxxx and
evidenced as a debit to Xxxxxxxx's loan account.
Borrower
may repay all or part of the
principal balance at any time without penalty. Such prepayment shall
be accompanied by payment of any unpaid interest accrued to the time of such
prepayment. All payments made hereunder shall at Xxxxxx's option
first be applied to late charges, then to accrued interest, then to
principal. Permitted partial prepayments shall not affect or vary the
duty of Borrower to pay all obligations when due, and they shall not affect
or
impair the right of Lender to pursue all remedies available to it hereunder,
under the security instruments securing this indebtedness, or under any other
loan documents or guaranty executed in connection herewith.
The
terms and provisions of this Note
are to be governed by and construed under the laws of the State of Florida
and
of the United States of America, and the rules and regulations promulgated
under
the authority thereof.
In
the event that any payment of
principal or interest is not made within ten (10) days after the date when
due
hereunder, it is hereby agreed that the Lender shall have the option of
collecting five percent (5%) of the amount of each such delinquent payment;
provided, however, such late fee shall not apply to the lump sum payment of
the
principal on the Maturity Date or the lump sum payment of principal upon
acceleration. Said late charge and/or interest shall be immediately
due and payable in full on demand by the Lender.
In
no event shall Lender have the right
to charge or collect, nor shall Borrower be required or obligated to pay,
interest or payments in the nature of interest, which would result in interest
being charged or collected at a rate in excess of the maximum rate of interest
allowed to be contracted for by applicable law as changed from time to time
(hereinafter called the "Maximum Rate"). In the event that any
payment which is interest or in the nature of interest is made by Borrower
or
received by Lender which would result in the rate of interest being charged
or
collected by the Lender is deemed to be in excess of the Maximum Rate, then
the
portion of any such payment which causes the rate of interest being charged
or
collected by Lender to exceed the Maximum Rate (hereinafter called the "excess
sum") shall be credited as a payment of principal. If Borrower
notifies Xxxxxx in writing that Borrower elects to have such excess sum returned
to Borrower, such excess sum shall be returned to Borrower. In the
event that any such overcharge is discovered after this Note has been paid
in
full, then the amount of such excess sum shall be returned to Borrower together
with interest
thereon from the date such excess sum was paid or collected at the same rate
as
was due Lender during such period under the terms of this Note. All
excess sums credited to principal shall be credited as of the date paid to
Xxxxxx.
2
The
"Default Interest Rate" shall be
five percent (5%) per annum above the contract interest rate set forth above,
not to exceed the Maximum Rate, or if no Maximum Rate is prescribed by
applicable law, 18% per annum. Upon a failure by Xxxxxxxx to repay
principal upon demand by Xxxxxx made not less than ten (10) days after the
date
due hereunder, Xxxxxx may declare the entire principal and interest then
remaining unpaid to be immediately due and payable without further notice or
demand, and the entire unpaid principal balance shall bear interest at the
"Default Interest Rate". In addition to the rights described in this
paragraph, Lender shall have the right to exercise all other rights or remedies
provided by law or at equity and shall specifically have the right to recover
all damages resulting from such default including, without limitation, the
right
to recover the payment of all amounts owing to Lender. Exercise of
any of these options shall be without notice to Borrower, notice of such
exercise being hereby expressly waived.
Time
is of the essence
hereunder. In the event that this Note is collected by law or through
attorneys at law, or under advice therefrom, Borrower and any other person
liable for payment hereof, to the extent of such liability, hereby agree to
pay
all costs of collection, including reasonable attorneys' fees and costs
(including charges for paralegals and others working under the direction or
supervision of Xxxxxx's attorneys) and all sales or use taxes thereon, whether
or not suit is brought, and whether incurred in connection with collection,
trial, appeal, bankruptcy or other creditor's proceedings or
otherwise.
Borrower
authorizes Xxxxxx, from time
to time, to debit any account that Borrower may have with Xxxxxx in the name
of
Borrower, for any payment of principal or interest past due hereunder for the
amount of such payment of principal or interest. Exercise of this
right shall be optional with Lender and the provisions of this paragraph shall
not be construed as releasing Borrower from the obligation to make payments
of
principal or interest according to the terms hereof. Borrower shall
have no right of setoff against the Lender under this Note or any instrument
securing this Note.
The
remedies of Lender as provided
herein shall be cumulative and concurrent, and may be pursued singularly,
successively, or together, at the sole discretion of Lender. No act
of omission or commission of Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by Xxxxxx and then only to the extent specifically
recited therein. A waiver or release with reference to any one event
shall not be construed as continuing, as a bar to, or as a waiver of release
of,
any subsequent right, remedy or recourse as to a subsequent event.
3
Borrower,
for itself and its successors
and assigns, hereby: (a) expressly waives any presentment, demand for payment,
notice of dishonor, protest, notice of nonpayment or protest, all other forms
of
notice whatsoever, and diligence in collection; (b) agrees that Lender, in
order
to enforce payment of this Note against them shall not be required first to
institute any suit or to exhaust any of its remedies against any Borrower or
any
other person or party or to attempt to realize on the collateral for this
Note.
BORROWER
AND ANY OTHER PERSON LIABLE
FOR PAYMENT HEREOF, BY EXECUTING THIS NOTE OR ANY OTHER DOCUMENT CREATING SUCH
LIABILITY, WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY ACTION WHETHER ARISING
IN CONTRACT OR TORT, BY STATUTE OR OTHERWISE, IN ANY WAY RELATED TO THIS
NOTE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR XXXXXX'S EXTENDING
CREDIT TO BORROWER AND NO WAIVER OR LIMITATION OF LENDER'S RIGHTS HEREUNDER
SHALL BE EFFECTIVE UNLESS IN WRITING AND MANUALLY SIGNED ON XXXXXX'S
BEHALF.
Borrower
acknowledges that the above
paragraph has been expressly bargained for by Xxxxxx as part of the loan
evidenced hereby and that, but for Xxxxxxxx's agreement and the agreement of
any
other person liable for payment hereof, Xxxxxx would not have extended the
loan
for the term and with the interest rate provided herein.
If
more than one party shall execute
this Note, the term "Borrower", as used herein, shall mean all parties signing
this Note and each of them, who shall be jointly and severally obligated
hereunder. In this Note, whenever the context so requires, the neuter
gender includes the feminine and/or masculine, as the case may be, and the
singular number includes the plural.
IN
WITNESS WHEREOF, Xxxxxxxx has caused
this Note to be executed in its name on the day and year first above
written.
THE
UNDERSIGNED ACKNOWLEDGES THAT THE
LOAN EVIDENCED HEREBY IS FOR COMMERCIAL PURPOSES ONLY AND NOT FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES.
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"BORROWER"
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DEER
VALLEY HOMEBUILDERS, INC.,
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a
Florida corporation
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By:
__________________________________
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Xxxx
Xxxxx, as its President
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(CORPORATE
SEAL)
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4
Addendum
A to Note
LIBOR
Index Rate
SECTION
1
Definitions.
As used in this Addendum, the following terms shall have the meanings set forth
below:
"Bank"
shall mean Fifth Third Bank and its successors and assigns.
"Borrower"
shall collectively and individually refer to the maker of the attached note
dated effective August ____, 2007 ("Note"). The terms of this Addendum are
hereby incorporated into the Note and in the event of any conflict between
the
terms of the Note and the terms of this Addendum, the terms of this Addendum
shall control.
"Business
Day" shall mean, with respect to Interest Periods applicable to the LIBOR Rate,
a day on which the Bank is open for business and on which dealings in U.S.
dollar deposits are carried on in the London Inter-Bank Market.
"Interest
Period" shall mean a period of one (1) month, provided that (i) the initial
Interest Period may be less than one month, depending on the initial funding
date and (ii) no Interest Period shall extend beyond the maturity date of the
Note.
"Interest
Rate Determination Date" shall mean the date the Note is initially funded and
the first Business Day of each calendar month thereafter.
"LIBOR
Rate" shall mean that rate per annum effective on any Interest Rate
Determination Date which is equal to the quotient of:
(i)
the
rate per annum equal to the offered rate for deposits in U.S. dollars for a
one
(1) month
period, which rate appears on that page of Bloomberg reporting service, or
such
similar service as determined by the Bank, that displays British Bankers’
Association interest settlement rates for deposits in U.S. Dollars, as of 11:00
A.M. (London, England time) two (2) Business Days prior to the Interest Rate
Determination Date; provided, that if no such offered rate
appears on such page, the rate used for such Interest Period will be the per
annum rate of interest determined by the Bank to be the rate at which U.S.
dollar deposits for the Interest Period, are offered to the Bank in the London
Inter-Bank Market as of 11:00 A.M. (London, England time), on the day which
is
two (2) Business Days prior to the Interest Rate Determination Date, divided
by
(ii)
a
percentage equal to 1.00 minus the maximum reserve percentages
(including any emergency, supplemental, special or other marginal reserves)
expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect
on
any day to which the Bank is subject with respect to any LIBOR loan pursuant
to
regulations issued by the Board of Governors of the Federal Reserve System
with
respect to eurocurrency funding (currently referred to as "eurocurrency
liabilities" under Regulation D). This percentage will be adjusted automatically
on and as of the effective date of any change in any reserve
percentage.
5
"Prime
Rate" shall mean the publicly announced prime lending rate of the Bank from
time
to time in effect, which rate may not be the lowest or best lending rate made
available by the Bank or, if the Note is governed by Subtitle 10 of Title 12
of
the Commercial Law Article of the Annotated Code of Maryland, "Prime Rate"
shall
mean the Wall Street Journal Prime Rate, which is the Prime Rate published
in
the "Money Rates" section of the Wall Street Journal from time to
time.
SECTION
2
Interest.
The Borrower shall pay interest upon the unpaid principal balance of the Note
at
the LIBOR Rate plus the margin provided in the Note. Interest shall be due
and
payable as provided in the Note and shall be calculated on the basis of a 360
day year and the actual number of days elapsed. The interest rate shall remain
fixed during each month based upon the interest rate established pursuant to
this Addendum on the applicable Interest Rate Determination Date.
SECTION
3
Additional
Costs. In the event that any applicable law or regulation or the
interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof (whether or not having
the force of law) (i) shall change the basis of taxation of payments to the
Bank
of any amounts payable by the Borrower hereunder (other than taxes imposed
on
the overall net income of the Bank) or (ii) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by the Bank, or
(iii) shall impose any other condition with respect to the Note, and the result
of any of the foregoing is to increase the cost to the Bank of making or
maintaining the Note or to reduce any amount receivable by the Bank hereunder,
and the Bank determines that such increased costs or reduction in amount
receivable was attributable to the LIBOR Rate basis used to establish the
interest rate hereunder, then the Borrower shall from time to time, upon demand
by the Bank, pay to the Bank additional amounts sufficient to compensate the
Bank for such increased costs (the "Additional Costs"”). A detailed statement as
to the amount of such Additional Costs, prepared in good faith and submitted
to
the Borrower by the Bank, shall be conclusive and binding in the absence of
manifest error.
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SECTION
4
Unavailability
Of Dollar Deposits. If the Bank determines in its sole discretion at
any time (the "Determination Date") that it can no longer make, fund or maintain
LIBOR based loans for any reason, including without limitation illegality,
or
the LIBOR Rate cannot be ascertained or does not accurately reflect the Bank's
cost of funds, or the Bank would be subject to Additional Costs that cannot
be
recovered from the Borrower, then the Bank will notify the Borrower and
thereafter will have no obligation to make, fund or maintain LIBOR based loans.
Upon such Determination Date the Note will be converted to a variable rate
loan
based upon the Prime Rate. Thereafter the interest rate on the Note shall adjust
simultaneously with any fluctuation in the Prime Rate.
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DEER
VALLEY HOMEBUILDERS, INC.,
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a
Florida corporation
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By:
__________________________________
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Xxxx
Xxxxx, as its President
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(CORPORATE
SEAL)
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7
