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EXHIBIT 10.3
REVOLVING CREDIT
PROMISSORY NOTE
January 19, 2005
$2,000,000
THIS NOTE
is made in Peoria, Illinois as of January 19, 2005, for Two
Million Dollars ($2,000,000), with interest
as provided herein.
RECITALS:
A. This
Note is made by Pioneer Railcorp ("Borrower"), and is payable
to
the order of National City Bank of the
Midwest ("Lender"). The holder from time
to time of this Note is referred to as
"Payee."
B. This
Note evidences the obligation of Borrower to pay to Lender the
principal amount of Two Million Dollars
($2,000,000), or, if less, the aggregate
unpaid principal amount of all advances
made by Lender to Borrower hereunder,
with interest on the balance remaining from
time to time unpaid at the "Interest
Rate" (as hereinafter defined) on the basis
hereinafter set forth. The Loan
evidenced by this Note is referred to
herein as the "Loan." This Note evidences
a revolving credit, which may be drawn by
Borrower from time to time and be
repaid and used again up to the face
principal amount hereof.
C. Lender and
Borrower have entered into a Loan Agreement of even date
herewith (the "Loan Agreement") with
respect to the Loan and other borrowings.
D. Payment
of this Note is secured by the Loan Documents, as that term is
defined in the Loan Agreement. Reference is
made to the Loan Documents for a
description of the property and the rights
of Payee with respect to such
security. All of the agreements,
conditions, covenants, provisions and
stipulations contained in the Loan
Documents are hereby made a part of this Note
to the same extent and with the same force
and effect as if they were fully set
forth herein and Borrower covenants and
agrees to keep and perform them, or
cause them to be kept and performed,
strictly in accordance with their
respective terms.
1.
Payment.
(a)
Borrower hereby promises to pay to the order of Payee the
principal
sum of Two Million Dollars ($2,000,000),
or, if less, the aggregate unpaid
principal amount, with interest thereon at
the Interest Rate, as follows:
(i)
Commencing
February 1, 2005 and on the first day of each month
thereafter to and including January 1, 2007, a payment of all
unpaid
interest accrued on the outstanding principal balance of the
Loan;
(ii)
All outstanding
principal and interest remaining unpaid, and all
other sums then due to Payee with respect to the Loan, on
January
19, 2007.
(b) The
term "Interest Rate" means, the interest rate from time to time
announced by Lender as its prime rate for
commercial loans (which may or may not
be the lowest rate charged by Lender).
(c) The
term "Maturity Date" shall mean January 19, 2007, subject to
the
acceleration provisions of this Note.
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(d) In the
event any installment of principal or interest hereunder shall
become overdue for a period in excess of
ten (10) days, Borrower shall pay to
the Payee a "late charge" equal to five
percent (5%) of the amount unpaid or
$25.00, whichever is greater, up to a
maximum amount of $250 per payment.
(e)
Payment of all amounts due under this Note shall be made at the
office
of Lender at 301 S. W. Adams Street,
Peoria, Illinois 61602, or such other place
as Payee may from time to time designate in
writing.
(f) This
Note may be prepaid, in whole or in part, as set forth in the
Loan Agreement.
(g) The
obligations of Borrower on this Promissory Note shall be
absolute
and unconditional in any and all
circumstances, and shall not be affected by any
circumstances of any character, including,
but not limited to any set-off,
counterclaim, recoupment, real or personal
defense or other right which Borrower
may have against the Lender, its successors
and assigns, or anyone else for any
reason whatsoever.
(h)
Notwithstanding any provisions of this Note or any instrument
securing
payment of the indebtedness evidenced by
this Note to the contrary, it is the
intent of Borrower and Payee that Payee
shall never be entitled to receive,
collect or apply, as interest on principal
of the indebtedness, any amount in
excess of the maximum rate of interest
permitted to be charged by applicable
law; and if under any circumstance
whatsoever, fulfillment of any provision of
this Note, at the time performance of such
provision shall be due, shall involve
transcending the limit of validity
prescribed by applicable law, then the
obligation to be fulfilled shall be reduced
to the limit of such validity; and
in the event Payee ever receives, collects
or applies as interest any such
excess, such amount which would be excess
interest shall be deemed a permitted
partial prepayment of principal and treated
hereunder as such; and if the
principal of the indebtedness secured
hereby is paid in full, any remaining
excess funds shall forthwith be paid to
Borrower. In determining whether or not
interest of any kind payable hereunder,
under any specific contingency, exceeds
the highest lawful rate, Borrower and Payee
shall, to the maximum extent
permitted under applicable law, (1)
characterize any non-principal payment as an
expense, fee or premium rather than as
interest and (2) amortize, prorate,
allocate and spread to the end that the
interest on account of such indebtedness
does not exceed the maximum amount
permitted by applicable law; provided that if
the amount of interest received for the
actual period of existence thereof
exceeds the maximum lawful rate, Payee
shall refund to Bo
