REVOLVING NOTE
Exhibit
10.16
Denver,
Colorado
September
28, 2006 $3,500,000
This
Revolving Note is executed and delivered under and pursuant to the terms of
that
certain Securities Purchase Agreement dated as of September 28, 2006 (the
“Purchase
Agreement”)
by and
among ACROSS AMERICA REAL ESTATE CORP., a Colorado corporation (the
“Company”),
BOCO
INVESTMENTS, LLC, a Colorado limited liability company, GDBA INVESTMENTS LLLP,
a
Colorado limited liability limited partnership, and XXXXXX X. XXXXXXX. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in the Purchase Agreement. This Revolving Note (the
“Note”)
is the
Revolving Note referred to in the Purchase Agreement and is subject to all
the
agreements, terms and conditions therein contained.
FOR
VALUE
RECEIVED, the Company hereby promises to pay to the order of GDBA INVESTMENTS,
LLLP, a Colorado limited liability limited partnership or registered assigns
(the "Holder")
on or
before September 28, 2009 (the "Maturity
Date")
the
principal sum of Three Million Five Hundred Thousand Dollars ($3,500,000),
or,
if different, from such amount the unpaid principal balance of the Revolving
Loans pursuant to the Purchase Agreement (the “Principal”).
All
payments due under this Note shall be made in lawful money of the United States
of America. At the time of the initial disbursement of a Revolving Loan and
at
each time any additional Revolving Loan shall be requested hereunder or
repayment made in whole or in part thereon, a notation thereof shall be made
on
the books and records of the Company. The failure to record any such amounts
or
any error in recording such amounts shall not, however, limit or otherwise
affect the obligations of the Company under this Note to repay the principal
amount of the Revolving Loans, together with all interest accruing thereon.
1. Interest;
Payments
(a) Interest
Rate.
Subject
to Section 1(b) and 1(c), this Note shall bear interest on the unpaid Principal
balance hereof at the rate (the “Interest
Rate”)
per
annum equal to the greatest of:
(i) the
ninety day average for U.S. Treasury Notes with a 10-year maturity as determined
on the last Business Day of each calendar quarter, using the constant maturity
calculation, plus
650
basis points;
(ii) eleven
percent (11%); or
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(iii) the
highest effective interest rate accruing on any outstanding Indebtedness for
Borrowed Money of the Company at any time during the applicable calendar
quarter.
(b) Default
Interest.
If an
Event of Default has occurred and is continuing, interest shall accrue on the
unpaid Principal balance of this Note at a rate (the “Default
Interest Rate”)
equal
to the higher of (i) the Interest Rate plus 800 basis points, or (ii)
twenty-four percent (24%) per annum.
(c) Applicable
Law.
Notwithstanding any provision of this Note, the Purchase Agreement or any other
agreement to the contrary, the Company shall not be required to pay, and the
Holder shall not be permitted to receive, any compensation that constitutes
interest under Applicable Law in excess of the maximum amount of interest
permitted by Applicable Law.
(d) Interest.
Accrued
and unpaid interest on the unpaid Principal balance of all Revolving Loans
outstanding from time to time shall be computed on the basis of a 365-day year
and the actual number of days elapsed and shall be payable quarterly on the
last
Business Day of each calendar quarter, beginning December 29, 2006. The
applicable Interest Rate for each calendar quarter shall be determined as
provided in Section 1(a) on the last Business Day of each calendar quarter.
(e) Payments.
All
payments shall be made at such address as the Holder shall hereafter give to
the
Company by written notice made in accordance with the provisions of this Note.
Whenever any amount expressed to be due by the terms of this Note is due on
any
day which is not a Business Day, the same shall instead be due on the next
succeeding day which is a Business Day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension
of
the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. In the event the aggregate outstanding
principal balance of all Revolving Loans by the Holder hereunder exceeds such
Holder’s Revolving Loan Commitment, the Company shall, without notice or demand
of any kind, immediately make such repayments of the Revolving Loans or take
such other actions as are satisfactory to the Holder as shall be necessary
to
eliminate such excess. The entire unpaid Principal amount of this Note, together
with any unpaid interest thereon, shall be due and payable on the Maturity
Date,
unless payable sooner in accordance with the provisions of this Note or the
Purchase Agreement.
(f) Prepayment.
The
unpaid Principal balance of this Note, together with all accrued and unpaid
interest, may at the Company’s option be prepaid in whole or in part, at any
time or from time to time upon ten (10) days’ prior written notice to the Holder
stating the Principal amount to be prepaid and the date on which such prepayment
shall be made. Any prepayments hereunder shall be applied first, to all interest
accrued but unpaid at such prepayment date and second, to outstanding Principal
amounts.
2. Subordination.
The
payment of principal and interest on this Note is hereby subordinated to the
Senior Debt and Holder will not ask, demand, xxx for, take or receive from
the
Company, by setoff or in any other manner, the whole or any part any amount
payable with respect
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to
this
Note (whether such amounts represent principal or interest, or obligations
which
are due or not due, direct or indirect, absolute or contingent), including,
without limitation, the taking of any negotiable instruments evidencing such
debt, nor any security for any of the Note, unless and until all Senior Debt,
whether now existing or hereafter arising, shall have been fully and
indefeasibly paid in full in cash and satisfied and all financing arrangements
between the Company and all holders of the Senior Debt have been terminated;
provided,
however,
that
Holder may receive from the Company scheduled payments of principal and interest
with respect to this Note on an unaccelerated basis (including early prepayments
pursuant to Section 1(f)) so long as no Senior Default has occurred and is
continuing or would result therefrom. If a Senior Default has occurred and
is
continuing or would result from any scheduled payment of principal or interest
by the Company with respect to this Note, then, until the Senior Default which
has occurred or which would result from such payment has been cured, no payment
of principal or interest shall be deemed due or otherwise payable under this
Note.
3. Events
of Default.
Each of
the following events shall be deemed an “Event
of Default”:
(a) The
Company fails to pay the Principal hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise;
(b) Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings
for
relief under any bankruptcy law or any law or the relief of debtors shall be
instituted by or against the Company or any subsidiary of the Company, unless
such proceeding shall be stayed within thirty (30) days;
(c) The
Company or any subsidiary of the Company shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business, or
such
a receiver or trustee shall otherwise be
appointed;
(d) Any
representation or warranty of the Company made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
herewith (including, without limitation, the Purchase Agreement or the
Registration Rights Agreement), shall be false or misleading in any material
respect when made and the breach of which has (or with the passage of time
will
have) a material adverse effect on the rights of the Holder with respect to
this
Note, or the Purchase Agreement;
(e) Any
representation or warranty of the Company made in any Request for Advance shall
be false or misleading in any material respect;
(f) Any
material failure by the Company to perform or observe any of its covenants
contained in the Purchase Agreement where such failure continues for a period
in
excess of five (5) days after written notice from the Holder or actual knowledge
of the Company of such failure;
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(g) If
a
final judgment, writ or similar process is entered or filed against the Company
or any subsidiary of the Company or any of its property or other assets in
an
amount in excess of $50,000, which is not, within twenty (20) days after the
entry thereof, discharged or the execution thereof stayed pending appeal, or
within twenty (20) days after the expiration of such stay, such judgment is
not
discharged;
(h)
Any
default with respect to any other Indebtedness for Borrowed Money or liabilities
of the Company or any of its subsidiaries in any amount in excess of (i) $50,000
individually or in the aggregate with respect to Indebtedness for Borrowed
Money, (ii) $50,000 individually with respect to liabilities and (iii) $100,000
in the aggregate with respect to liabilities and Indebtedness for Borrowed
Money, provided,
that
such event shall only constitute an “Event of Default” where the effect of such
default is to permit the holder thereof to accelerate the maturity of such
Indebtedness for Borrowed Money or liabilities, as the case may be, but only
if
(x) the holder elects to exercise such a right to accelerate the maturity of
such Indebtedness for Borrowed Money or liabilities, as the case may be, and
(y)
where such default continues for a period of fifteen (15) days after written
notice from the Holder or actual knowledge of the Company of such a default,
and
provided,
further,
that a
default with respect to liabilities shall not constitute an “Event of Default”
where the Company in good faith objects to the amount or obligation to pay
the
applicable liability and makes appropriate reserves for such liability, if
necessary, in accordance with GAAP.
(i) Any
liquidation, dissolution or winding up of the Company and its subsidiaries
or
its business;
(j) If
the
Company reports a net loss, as determined in accordance with U.S. generally
accepted accounting principles, in excess of (i) $1,000,000 for any calendar
quarter after the date hereof, or (ii) $2,500,000 for any three consecutive
calendar quarters after the date hereof;
(k) Any
event, circumstance or conditions exists which could reasonably be expected
to
result in a Material Adverse Effect on the Company and its Subsidiaries,
provided that
the
Holder shall provide thirty (30) days written notice to the Company if it
intends to declare an Event of Default under this paragraph 3(k) and provide
the
Company with an opportunity to present evidence satisfactory to the Holder
in
its sole discretion that such event, circumstance or condition has been
remedied; or
(l) The
Company shall fail to maintain the listing of the Common Stock on at least
one
of the OTCBB or any equivalent replacement exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock
Exchange or the American Stock Exchange
4. Consequences
of Event of Default
(a) If
there
shall occur, after the fulfillment of any applicable notice and cure provisions
(if any), any Event of Default specified in sections (a), (b) or (c) of Section
3 hereof, the unpaid Principal balance of this Note and all accrued interest
thereon shall be immediately due and
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payable,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived.
(b) If
there
shall occur, after the fulfillment of any applicable notice and cure provisions
(if any), any Event of Default other than those listed in Section 4(a) above,
the Holder may, at its option, by written notice to the Company, declare the
entire Principal balance of his Note and all accrued interest thereon due and
payable, and the same shall thereupon become immediately due and payable without
presentment, demand, protest or (except as required hereby) notice of any kind,
all of which are expressly waived.
(c) If
an
Event of Default shall occur, the Company shall pay the Holder hereof all costs
of collection, including reasonable attorneys' fees.
5. Definitions
“Applicable
Law”
means
that law in effect from time to time and applicable to this Note which lawfully
permits the contracting, charging, taking, reserving and/or collection of the
highest permissible lawful, non-usurious rate of interest or amount of interest
on or in connection with this Note.
“Business
Day”
means
any day other than a Saturday, Sunday or a day on which commercial banks in
the
city of Denver, Colorado are authorized or required by law or executive order
to
remain closed.
“Senior
Debt”
means
all indebtedness, obligations and other liabilities of the Company to Vectra
Bank Colorado, national association, pursuant to that certain First Amendment
to
Credit Agreement dated August 3, 2006, as amended.
“Senior
Default”
means
any “Default,” “Event of Default” or any condition or event that (with or
without notice, lapse of time, or both) would permit Holders of Senior Debt
to
accelerate the maturity of such Senior Debt if that condition or event were
not
cured or removed within any applicable grace or cure period set forth
therein.
6. Miscellaneous
(a) No
failure or delay on the part of the Holder 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 privileges. All rights
and remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
(b)
Any
notice herein required or permitted to be given shall be in writing and may
be
personally served or delivered by courier or sent by United States mail and
shall be deemed to have been given upon receipt if personally served (which
shall include telephone line facsimile transmission) or sent by courier or
three
(3) days after being deposited in the United
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States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the addresses of the parties for receipt of notice
hereunder are:
If
to
the Company:
Across
America Real Estate Corp.
0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000
Attention:
Chief Executive Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
copy to:
Xxxxx
Xxxxxx & Associates, P.C.
0000
Xxxx
Xxxxxxxx Xxx.
Xxxxxxxxx
Xxxxx
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
the Holder:
GDBA
Investments, LLLP
0000
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Chief Executive Officer
With
a
copy to
Xxxxx
& Xxxxxxx X.X.
Xxxxx
000, Xxxxxx Xxxxxx
0000
Xxxxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxxx
(c) This
Note
and any provision hereof may only be amended by an instrument in writing signed
by the Company and the Holder. The term "Note" and all reference 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.
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(d) This
Note
shall be binding upon the Company and its successors and assigns, and shall
inure to be the benefit of the Holder and its successors and assigns.
Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other lending
arrangement.
(e) Wherever
possible, each provision of the Purchase Agreement and this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Purchase Agreement or this Note shall be prohibited
by or be invalid under such law, such provision shall be severable, and be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of the Purchase Agreement or this Note.
(f) This
Note
shall be enforced, governed by and construed in accordance with the laws of
the
State of Colorado applicable to agreements made and to be performed entirely
within such state, without regard to the principles of conflict of laws. The
parties hereto hereby submit to the exclusive jurisdiction of federal or state
courts located in Denver, Colorado with respect to any dispute arising under
this Note. Both parties irrevocably waive the defense of an inconvenient forum
to the maintenance of such suit or proceeding. Both parties further agree that
service of process upon a party mailed to the notice address set forth in this
Note by registered first class mail shall be deemed in every respect effective
service of process upon the party in any such suit or proceeding. Nothing herein
shall affect either party’s right to serve process in any other manner permitted
by law. Both parties agree that a final non-appealable judgment in any such
suit
or proceeding shall be conclusive and may be enforced in other jurisdictions
by
suit on such judgment or in any other lawful manner.
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IN
WITNESS WHEREOF, Company has caused this Note to be signed in its name by its
duly authorized officer this 28th day of September, 2006.
| |
|
ACROSS AMERICA REAL ESTATE CORP. |
| By: | /s/ Xxx X. Xxxxxxx | |
|
Name: Xxx X. Xxxxxxx |
||
| Title: Chief Executive Officer | ||
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