TERM LOAN NOTE
| $5,000,000 |
September 13, 2007 |
FOR
VALUE RECEIVED, the undersigned, FORTIFIED HOLDINGS CORP.
(formerly Aegis Industries, Inc.), a Nevada corporation (
“Maker” ), does hereby promise to pay to the
order of THOMAS KEENAN VENTURES, LLC (
“Holder” ), at its office at 71 Wright Street,
Westport, CT 06880, or at such other place as the holder hereof
(including Holder, hereinafter referred to as “ Holder
”) may designate, the principal sum of FIVE MILLION
DOLLARS ($5,000,000) , in Dollars and in immediately available
funds, together with interest on the unpaid principal under this
Note beginning on the date hereof, before and after maturity (by
acceleration or otherwise) or judgment (but subject to the default
rate of interest set forth below), at the per annum rates described
below, and to pay all taxes (except taxes on the overall net income
or gross receipts of Holder) levied or assessed on this Note or the
debt evidenced hereby against Holder, and together with all costs,
expenses and attorneys' and other professional fees incurred in any
action to collect and/or enforce this Note or other agreement
relating to this Note or in any litigation or controversy arising
from or connected with this Note.
This
Note has been executed and delivered subject to the following terms
and conditions:
1.
Definitions .
As used
above, in this Paragraph 1 and elsewhere in this Note, the
following terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the
terms defined):
“Business
Day” means any day that is not a Saturday, Sunday or a day on
which commercial banks located in Hartford, Connecticut are
required or authorized by law to close.
“Change
of Control” means any one of the following events: (i) the
consummation of a merger, reorganization, consolidation or sale or
other transfer of all or substantially all of the assets of the
Maker or all or substantially all of the combined voting power of
the Maker’s then outstanding voting securities (“
Outstanding Voting Securities ”) (each a “
Corporate Transaction ”), excluding, however,
such a Corporate Transaction pursuant to which all or substantially
all of the persons who are the beneficial owners of the Outstanding
Voting Securities immediately prior to such Corporate Transaction
will beneficially own, directly or indirectly, more than 50% of the
Outstanding Voting Securities of the corporation or other entity
resulting from such Corporate Transaction.
“Default
Rate” shall have the meaning assigned to it in Section 2(b)
hereof.
“Dollar”
and the sign “$” mean lawful money of the United States
of America.
“Event
of Default” shall have the meaning assigned to that term in
Paragraph 7 hereof.
“Federal
Funds Rate” means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate (rounded upward, if
necessary, to a whole multiple of 1/100 of 1%) charged to banking
institutions on such day on such transactions as determined by
Holder.
“Guaranty”
means that certain Continuing Guaranty Agreement of Guarantor dated
as of even date herewith in favor of Holder.
“Guarantor”
means Fortified Data Communications, Inc. (formerly Aegis Merger
Corporation).
“Loan”
means the loan evidenced by this Note.
“Loan
Documents” means this Note, the Guaranty and any other
documents relating thereto.
“Maturity
Date” means March 31, 2008.
“Merger
Documents” means that certain Agreement and Plan of Merger
dated as of even date herewith by and among Z5 Technologies LLC,
Aegis Merger Corporation, (k/n/a/ Fortified Data Communications,
Inc.) , Aegis Industries, Inc. (k/n/a/ Fortified Holdings Corp.)
and Thomas Keenan Ventures, LLC, and any other related document
including, but not limited to, the Related Documents, the New
Employment Agreements and the Registration Rights Agreement.
“Obligations”
means all advances to, and debts, liabilities, obligations,
covenants and duties of, Maker arising under any Loan Document or
otherwise with respect to any loan by Holder to Maker or under the
Merger Documents, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become
due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against Maker or any
affiliate thereof of any proceeding under any debtor relief laws
naming such person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such
proceeding, and all reasonable out-of-pocket costs, expenses, fees,
charges and attorneys’, paralegals’ and professional
fees incurred in connection with any of the foregoing, or in any
way connected with, involving or relating to the preservation,
enforcement, protection or defense of, or realization under this
Agreement, the Note, any of the other Loan Documents or the Merger
Documents, any related agreement, document or instrument, and the
rights and remedies hereunder or thereunder.
“ Principal Repayment Date” means each
date a payment of principal is due pursuant to Section 3(b)
.
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2.
Interest Rates, Interest Periods, Default Rate, Calculation of
Interest, Lawful Interest .
(a)
Pre-default Rates . Subject to the terms of Paragraph 2(b),
the Loan shall bear interest at a rate per annum equal to five
percent (5%).
(b)
Default Rate . Upon the occurrence of an Event of Default or
after maturity (by acceleration or otherwise) or after judgment has
been rendered on this Note, the unpaid principal balance of this
Note shall automatically and without notice bear interest at the
lesser of (i) thirteen percent (13%), or (ii) the maximum rate per
annum permitted by applicable law, if any (the “ Default
Rate ”).
(c)
Calculation of Interest . All computations of interest under
this Note shall be made on the basis of a 360 day year and the
actual number of days elapsed.
(d)
Lawful Interest . Notwithstanding any provisions of this
Note, it is the understanding and agreement of Maker and Holder
that the maximum rate of interest to be paid by Maker to Holder
shall not exceed the highest or the maximum rate of interest
permissible to be charged under the laws of the State of
Connecticut. In this regard, it is expressly agreed that it is the
intent of Maker and Holder in the execution, delivery and
acceptance of this Note to contract in strict accordance with the
laws of the State of Connecticut (without regards to its conflict
of laws provisions) from time to time in effect. If, at any time,
the rate of interest, together with all amounts which constitute
interest and which are reserved, charged or taken by Holder as
compensation for fees, services or expenses incidental to the
making, negotiating or collection of the Loan, shall be deemed by
any competent court of law or other governmental authority to
exceed the maximum rate of interest permitted to be charged by
Holder to Maker, then, during such time as such rate of interest
would be deemed excessive, that portion of each sum paid
attributable to that portion of such interest rate that exceeds the
maximum rate of interest so permitted shall be deemed a voluntary
prepayment of principal.
3. Payments
.
(a)
Interest . Interest on the Loan shall be due and payable in
Dollars in immediately available funds on each Principal Repayment
Date.
(b)
Principal . Principal shall be due and payable in Dollars in
immediately available funds as follows: (i) five hundred thousand
dollars ($500,000) on October 8, 2007; (ii) one million dollars
($1,000,000) on November 15, 2007; (iii) one million dollars
($1,000,000) on January 1, 2008, (iv) one million two hundred fifty
thousand dollars ($1,250,000) on February 15, 2008; and (v) one (1)
final installment in an amount equal to the then outstanding
principal on the Maturity Date. Notwithstanding anything herein to
the contrary, unless sooner accelerated as a result of the
occurrence of an Event of Default, the entire outstanding
indebtedness under this Note, including, but not limited to,
outstanding principal together with any and all accrued and unpaid
interest and any other amounts due hereunder, shall be due and
payable in full, in Dollars and in immediately available funds on
the Maturity Date.
(c)
Method of Payment . Maker shall make each payment due under
this Note to Holder not later than 3:00 P.M., Stamford, Connecticut
time on the date when due in Dollars in
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immediately available funds, without setoff,
defense or counterclaim. Whenever any payment to be made under this
Note shall be stated to be due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall be included in the
computation of the payment of interest.
4. Late
Charge . Holder may collect a late charge not to exceed five
(5) percent of any installment of interest or payment of principal
or any other amount due to Holder, which is not paid or reimbursed
in full, in Dollars and in immediately available funds by Maker
within ten (10) days of the due
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