TERM NOTE
$4,723,832.18
Albuquerque,
New Mexico
November
30, 2007
FOR VALUE RECEIVED, the
undersigned maker BOWLIN TRAVEL CENTERS,
INC. ("Borrower") promises to pay to the order of
BANK OF THE WEST ("Bank") at such place as
the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds,
the principal sum of Four Million Seven Hundred
Twenty Three Thousand Eight Hundred Thirty Two and 18/100
dollars ( $4,723,832.18 ) , with
interest thereon as set forth herein.
Section
1. DEFINITIONS:
As
used herein, the following terms shall have the meanings set
forth after each, and any other term defined in this Note
shall have the meaning set forth at the place
defined:
(a) "Business
Day" means any day except a Saturday, Sunday or any other day
on which the Bank is authorized or required by law to
close.
(b) "CMT
Interest Rate" means at any time the rate of interest
calculated as the rate of interest equal to the weekly average
yield on U.S. Treasury Securities, adjusted to a constant
maturity of five years as published from time to time and made
available in Federal Reserve Board Statistical Release H.15
(519) or, if such source is not available, such alternate
source as determined by the Bank.
(c) “Maturity”
means the date the balance of this Note is due and payable in
full; November 30, 2017.
Section
2. INTEREST: The outstanding
principal balance of this Note shall bear interest (computed
on the basis of a 360-day year, actual days elapsed) at a
fluctuating rate per annum equal to the CMT Interest
Rate:
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i)
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on
the Note date plus 2.50% (currently 5.92%) fixed for five (5)
years, and
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ii)
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adjusted
on December 1, 2012 to the CMT Interest Rate on such date plus
2.50% fixed, until the Note is paid at Maturity.
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Section
3. REPAYMENT AND PREPAYMENT:
(a)
Repayment . The Note shall be repaid in
monthly payments of principal and interest, commencing January
1, 2008:
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i)
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for
January 1, 2008 through December 1, 2012, $33,625.35 per month,
and
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ii)
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for
January 1, 2013 through November 1, 2017, equal monthly payments
calculated on principal amortization over a remaining theoretical
15 year maturity plus accrued interest, and
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iii)
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at
Maturity, a final payment of any unpaid amount due on the
Note.
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(b)
Application of Payments . Each payment made on
this Note shall be credited first, to any cost and expenses of
collection, second to interest then due, and third to the
outstanding principal balance hereof.
(c)
Prepayment . Borrower may prepay all or any part
of the principal on this Note at any time(s) and without any
prepayment penalty.
(d)
Default Interest . Upon Default and after
Maturity, or such earlier date as all principal owing hereunder
becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest
until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent
(4%) above the rate of interest from time to time applicable to
this Note.
Section
4. FINANCIAL COVENANTS:
(a)
Borrower
shall provide to Bank not later than 120 days after and as of the
end of each fiscal year, Borrower’s audited financial
statements prepared by a certified public accountant acceptable to
Bank.
(b)
Borrower
shall provide to Bank Borrower’s interim company prepared
statements, not later than 60 days after and as of the end of each
fiscal quarter end. Interim financial statements shall
include a balance sheet, a statement of profit and loss and a
statement of changes in shareholder's equity, certified as correct
by an authorized agent of the Borrower.
(c)
Borrower
shall maintain a minimum Debt Service Coverage ratio of not less
than 1.
