Exhibit 10.10
SECOND AMENDED AND RESTATED
SECURED TERM NOTE
$417,511.92
Original Date: August 8,
2008
Amended and Restated Date: August 26, 2008
(Document Dated August 8, 2008)
Second Amended and Restated Date: July 24,
2009
FOR VALUE RECEIVED, PA LLC (f/k/a
PetroAlgae, LLC), a Delaware limited liability company (the “
Maker ”) promises to pay to Valens U.S. SPV I, LLC,
c/o Valens Capital Management, LLC (the “ Payee
”) at 335 Madison Avenue, 10 th Floor, New York, New York 10017, or at such
other place as may be designated in writing by the Payee of this
Second Amended and Restated Secured Term Note (this “ Term
Note ”), the principal sum of Four Hundred Seventeen
Thousand Five Hundred Eleven and 92/100 Dollars ($417,511.92)
together with any accrued and unpaid interest hereon, on
June 30, 2012 (the “ Maturity Date ”) if
not sooner indefeasibly paid in full.
Interest payable on the outstanding
principal amount of this Term Note (including all PIK Amounts (as
defined below) added thereto, the “ Principal Amount
”) shall accrue at a rate per annum equal to twelve percent
(12%) (the “ Contract Rate ”). Interest
shall be (i) calculated on the basis of a 360 day year, and
(ii) payable monthly, in arrears, commencing on
September 1, 2008, on the first business day of each
consecutive calendar month thereafter through and including the
Maturity Date, and on the Maturity Date, whether by acceleration or
otherwise (each, an “ Interest Payment Date
”). Through any Interest Payment Date, interest on the
Principal Amount of this Term Note at the Contract Rate that shall
have accrued and shall remain unpaid as of such Interest Payment
Date (for any Interest Payment Date, a “ PIK Amount
”) shall be paid on such Interest Payment Date by addition of
such PIK Amount to the Principal Amount. At the option of the
Payee, the PIK Amounts added to the principal amount outstanding
under this Term Note during such year shall be evidenced by a note
(a “ PIK Note ”) in form and substance
satisfactory to the Payee, provided, however, that such PIK Note
shall not be necessary to evidence such portion of the Principal
Amount nor shall the absence of such PIK Note relieve the Maker of
their its obligation to pay such portion of the Principal Amount to
the Payee. Notwithstanding any other provision of this Term
Note and the addition of any PIK Amount to the principal amount
outstanding under this Term Note, the Maker may, in its sole
discretion, pay any PIK Amount in cash on any Interest Payment Date
without any premium or penalty. The Maker shall give written
notice to the Payee of any such payment of a PIK Amount in cash not
less than one (1) Business Day prior to the applicable
Interest Payment Date. All cash payments by the Companies of
any PIK Amount that has been added to the principal amount of this
Term Note shall be deducted from the Principal Amount.
This Term Note amends and restates
in its entirety (and is given in substitution for and not in
satisfaction of) that certain Amended and Restated Short Term
Demand Note issued as of August 26, 2008 (and dated
August 8, 2008) in the original principal amount of
$417,511.92 made by Maker to Payee which further amended that
certain Short Term Demand Note dated as August 8, 2008 in the
original principal amount of $417,511.92 made by Maker in favor of
Payee.
1. USE OF PROCEEDS. The proceeds of
the loan made pursuant to this Term Note shall be used by Maker
solely for working capital purposes.
2. OPTIONAL REDEMPTION IN CASH. The
Maker may prepay this Term Note (“ Optional Redemption
”) by paying to the Payee a sum of money equal to the
Principal Amount outstanding at such time together with accrued but
unpaid interest thereon and any and all other sums due, accrued or
payable to the Payee arising under this Term Note (the “
Redemption Amount ”) outstanding on the Redemption
Payment Date (as defined below). The Maker shall deliver to the
Payee a written notice of redemption (the “ Notice of
Redemption ”) specifying the date for such Optional
Redemption (the “ Redemption Payment Date ”),
which date shall be within ten (10) business days after the
date of the Notice of Redemption (the “ Redemption
Period ”). On the Redemption Payment Date, the Redemption
Amount must be paid in good funds to the Payee. In the event the
Maker fails to pay the Redemption Amount on the Redemption Payment
Date as set forth herein, then such Redemption Notice will be null
and void.
3. EVENT OF DEFAULT. The occurrence
of any of the following events set forth in this section shall
constitute an event of default (“ Event of Default
”) hereunder:
a. Failure to Pay . The Maker
fails to pay on demand hereunder any of principal, interest or
other fees hereon in accordance herewith, or the Maker fails to pay
any of the other Obligations (under the Amended and Restated Master
Security Agreement, dated as of the date hereof, which amends and
restates the Master Security Agreement, dated August 8, 2008
(as further amended, restated, modified and/or supplemented from
time to time, the “ Master Security Agreement ”)
by and between LV Administrative Services, Inc., as Agent (in its
capacity as administrative and/or collateral agent, the “
Agent ”) the Maker and PetroAlgae Inc. (“
PetroAlgae ”) when due; or
b. Breach of Covenant . The
Maker, any guarantor of the Obligations (each a “
Guarantor ”) or any of its subsidiaries breaches any
covenant or any other term or condition of this Term Note, the
Master Security Agreement or any other Document (as defined in the
Master Security Agreement) in any material respect and such breach,
if subject to cure, continues for a period of fifteen
(15) days after the occurrence thereof; or
c. Breach of Representations and
Warranties . Any representation, warranty or statement made or
furnished by the Maker or Guarantor in this Term Note, the Master
Security Agreement or any other Document (as defined in the Master
Security Agreement) shall at any time be false or misleading in any
respect on the date as of which made or deemed made; or
d. Default Under the Master
Security Agreement . The occurrence of any default (or similar
term) in the observance or performance of the Master Security
Agreement or any other Document (as defined in the Master Security
Agreement) or condition relating to any indebtedness or contingent
obligation of the Maker, the Guarantor, or any of their respective
subsidiaries; or
e. Bankruptcy . The Maker or
Guarantor shall (i) apply for, consent to or suffer to exist
the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general
assignment for the benefit of creditors, (iii) commence a
voluntary case under the federal bankruptcy law
