EXHIBIT
4.7
THIS NOTE
AND THE SECURITIES
REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
APPLICABLE
STATE SECURITIES LAWS AND HAVE BEEN TAKEN FOR INVESTMENT
PURPOSES
ONLY AND NOT WITH A
VIEW TO OR FOR SALE IN
CONNECTION WITH
ANY
DISTRIBUTION THEREOF.
NEITHER THIS NOTE NOR
THE SECURITIES
REPRESENTED
HEREBY
MAY BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION AND
QUALIFICATION
WITHOUT, EXCEPT UNDER CERTAIN SPECIFIC
LIMITED
CIRCUMSTANCES,
AN OPINION OF COUNSEL
FOR THE LENDER,
REASONABLY
ACCEPTABLE
TO THE COMPANY, THAT
SUCH REGISTRATION AND
QUALIFICATION ARE
NOT
REQUIRED.
DELTA MUTUAL, INC.
6% CONVERTIBLE PROMISSORY NOTE
$266,000
April 5, 2007
Sellersville, Pennsylvania
FOR VALUE
RECEIVED, DELTA MUTUAL INC., a Delaware corporation (the
"Company"), with
offices at 111 North
Branch Street,
Sellersville,
PA
18960,
promises to pay to Congregation Azrial Yehuda, a New York
corporation, (the
"Lender"), of 283 Rutledge Avenue, Brooklyn, NY 11211 in
lawful
money of the United
States of America, the
principal sum of Two
Hundred
Sixty Six Thousand Dollars ($266,000), together with interest
from
the date
of this Note on the unpaid principal balance at a rate equal to
six
percent (6.0%) per annum, computed on the basis of a year of
360 days
and
compounded
annually on the last
day of the calendar year. All unpaid
principal,
together with any then unpaid and accrued
interest and other
amounts
payable hereunder,
shall be due and payable at any time after the
earlier of
(i) the Maturity Date (as defined below), or (ii) when, upon or
after the
occurrence
of an Event of Default
(as defined below), such
amounts
are declared due and
payable by the Lender or made automatically
due and
payable in accordance with the terms hereof.
The
following is a statement of the rights of the Lender and the
conditions to which
this Note is subject, and to which the Lender, by the
acceptance of this Note, agrees:
Definitions. As used in this Note, the following capitalized terms
have
the following meanings:
1.1
"Common Stock" shall mean the common stock, par value $.0001
per
share, of Delta Mutual, Inc., a Delaware corporation.
1.2
"Company" includes the corporation initially executing this Note
and
any Person which shall succeed to or assume the obligations of the
Company under
this Note.
1.3 "Event
of Default" has the meaning given in Section 6 hereof.
1.4
"Lender" shall mean the Person specified in the introductory
paragraph
of this Note or any Person who shall at the time be the registered
holder of
this Note.
1.5
"Maturity Date" shall mean September 6, 2007.
1.6
"Obligations" shall mean all obligations, owed by the Company to
the
Lender, now existing or hereafter arising under or pursuant to the
terms of this
Note.
1.7
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock the
Company, a limited
liability the Company, an unincorporated association, a joint
venture or other
entity or a governmental authority.
2. Interest. All accrued and unpaid interest on this Note shall be
due and
payable on the Maturity Date.
3. Seniority. This Note shall be senior to all
general obligations of the Company including, trade payables and
other
obligations incurred in the ordinary course of business.
<PAGE>
4. Repayment at the Company's Option. At any time after the date
hereof and
prior to the Maturity Date, the Company may repay this Note,
including all
interest accrued on this Note, without penalty or premium, in whole
or in part;
provided that any such repayment will be applied first to the
payment of unpaid
interest accrued on this Note and second, to the payment of
principal of this
Note, by providing thirty (30) days prior written notice to the
Lender.
Notwithstanding the foregoing, prior to the expiration of the
thirty-day notice
period, the Lender shall have the right to convert this Note in
accordance
herewith prior to any such repayment, subject to the limitation set
forth in
Section 8.1 hereof.
5. Representations and Warranties of The Lender. The Lender
represents and
warrants to the Company upon the acquisition of the Note as
follows:
5.1 Binding
Obligation. The Lender has full legal capacity, power and
authority
to execute and deliver this Note and to perform its obligations
hereunder.
This Note is a valid and binding obligation of the Lender,
enforceable in accordance with its terms, except as limited by
bankruptcy,
insolvency
or other laws of general application relating to or affecting
the
enforcement of creditors' rights generally and general principles
of
equity.
5.2 Securities
Law Compliance. The Lender has been advised that this Note has
not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws and, therefore,
cannot be
resold
unless it is registered under the Securities Act and applicable
state
securities laws or unless an exemption from such registration
requirements is available. The Lender is aware that the Company is
under
no
obligation to effect any such registration with respect to this
Note or
to file
for or comply with any exemption from registration. The Lender
is
purchasing
this Note for its own account for investment, not as a nominee
or agent,
and not with a view to, or for resale in connection with, the
distribution thereof. The Lender has such knowledge and experience
in
financial
and business matters that the Lender is capable of evaluating
the merits
and risks of such investment, is able to incur a complete loss
of such
investment and is able to bear the economic risk of such
investment
for an indefinite period of time.
6. Events of Default. The occurrence of any of the following shall
constitute an
"Event of Default" under this Note:
6.1 Failure to
Comply With Covenants. The Company shall have failed to
perform,
keep, or observe any other material term, provision, condition,
covenant,
or agreement contained in this Note and has failed to cure such
default
within fifteen (15) business days after the Company's receipt
of
written
notice from the Lender of such default;
6.2 Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i)
apply for
or consent to the appointment of a receiver, trustee,
liquidator
or
custodian of itself or of all or a substantial part of its
property,
(ii) be
unable, or admit in writing its inability, to pay its debts
generally
as they mature, (iii) make a general assignment for the benefit
of its or
any of its creditors, (iv) be dissolved or liquidated, (v)
become
insolvent (as such term may be defined or interpreted under any
applicable
statute), (vi) commence a voluntary case or other proceeding
seeking
