REVOLVING CREDIT NOTE (the "Note")
Exhibit
10.2
(the
"Note")
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$2,500,000.00
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Dated:
April ___, 2007
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FOR
VALUE
RECEIVED, the undersigned borrower, DEER
VALLEY CORPORATION,
a
Florida 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 Credit Loan and Security Agreement of even date herewith (the "Credit
Agreement"), the principal sum not to exceed $2,500,000.00, or so much thereof
as has been disbursed for advances hereunder.
The
Interest Rate shall be a variable rate at 260 basis points (2.60%) 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 May 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 Borrower, such sum may be
borrowed again) until this Note is terminated. At no time, however, shall the
principal balance outstanding hereunder exceed $2,500,000.00.
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.
As
provided in the Credit Agreement, the Note is to be utilized by Borrower on
a
revolving credit basis for acquisition of complimentary businesses, short-term
working capital needs as well as a Letter of Credit facility utilized to support
letters of credit issued by Lender for the benefit of Borrower.
This
Loan
facility matures one (1) year from the date hereof. If any letters of credit
supported by this Loan facility are redeemed, the amount so redeemed is due
on
demand in accordance with the Credit Agreement. 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 Borrower and evidenced as a
debit
to Borrower's loan account.
Initials:
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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 Lender'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. It is the intent of this
Note that such laws shall be interpreted in such a manner that after default
the
maximum rate of interest allowed to be contracted for by applicable law as
changed from time to time which is applicable to this Note (hereinafter called
the "Maximum Rate") be as great as possible.
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. 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 being 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 exceed the Maximum Rate
(hereinafter called the "excess sum") shall be credited as a payment of
principal. If Borrower notifies Lender 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
Lender.
Initials:
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2
The
"Default Interest Rate" shall be five percent (5%) per annum above the contract
interest rate set forth above, but not exceeding 18% per annum. Upon a failure
by Borrower to repay principal upon demand by Lender made not less than ten
(10)
days after the date due hereunder, Lender 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 Lender'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 Lender, from time to time, to debit any account that Borrower may
have with Lender 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 Lender 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.
Initials:
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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 LENDER'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 LENDER'S
BEHALF.
Borrower
acknowledges that the above paragraph has been expressly bargained for by Lender
as part of the loan evidenced hereby and that, but for Borrower's agreement
and
the agreement of any other person liable for payment hereof, Lender 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, Borrower 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 CORPORATION,
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a
Florida corporation
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By:
__________________________________
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Xxxxxxx
X. Xxxxxxx, as its President
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(CORPORATE
SEAL)
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Initials:
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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 April ___, 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.
Initials:
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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 (which principal balance shall
not include the Letter of Credit Obligations until such Letter of Credit
Obligations are drawn upon and honored by the Bank, and remain unreimbursed
by
Borrower). 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.
Initials:
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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 CORPORATION,
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a
Florida corporation
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By:
__________________________________
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Xxxxxxx
X. Xxxxxxx, as its President
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(CORPORATE
SEAL)
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