THIS INSTRUMENT IS
BEING EXECUTED BY THE BORROWER AND DELIVERED TO BANK OUTSIDE THE
STATE OF FLORIDA AND ACCORDINGLY, NO FLORIDA DOCUMENTARY STAMP TAX
IS DUE.
REVOLVING PROMISSORY
NOTE
$2,500,000.00
February 16,
2004
Aerosonic
Corporation
1212
North Hercules Avenue
Clearwater, FL
33765
Avionics
Specialties, Inc.
3367
Earlysville Road
Earlysville,
Virginia 22936
(Individually and
collectively "Borrower")
Wachovia Bank,
National Association
214
North Hogan Street - FL0070
Jacksonville,
Florida 32202
(Hereinafter
referred to as “Bank")
Borrower promises
to pay to the order of Bank, in lawful money of the United States
of America, at its office indicated above or wherever else Bank may
specify, the sum of up to Two Million, Five Hundred Thousand and
No/100 Dollars ($2,500,000.00) or such sum as may be advanced and
outstanding from time to time, with interest on the unpaid
principal balance at the rate and on the terms provided in this
Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").
SECURITY
.
Borrower has granted to Bank a security interest in the
personal property Collateral as defined in the Loan Agreement,
including, but not limited to, Borrower’s inventory,
accounts, chattel paper, instruments and documents, equipment and
investment property.
REVOLVING CREDIT
ADVANCES . This is a
revolving credit note. Subject to any limitations in the Loan
Agreement, as hereafter defined, Borrower may borrow, repay and
reborrow, and Bank may advance and readvance under this Note
respectively from time to time (each an "Advance" and together the
"Advances"), so long as the total indebtedness outstanding at any
one time under this Note, as further provided by the Loan Agreement
(as hereafter defined), does not exceed the principal amount stated
on the face of this Note. Bank's obligation to advance or
readvance under this Note shall terminate if a Default exists under
the Loan Agreement.
INTEREST
RATE. Interest
shall accrue on the unpaid principal balance of this Note from the
date hereof at the
LIBOR
Market Index Rate plus 3.00%, as that rate may change from day to
day in accordance with changes in the LIBOR Market Index Rate
("Interest Rate"). "LIBOR Market
Index Rate", for any day, means the rate for 1 month U.S. dollar
deposits as reported on Telerate page 3750 as of 11:00 a.m., London
time, on such day, or if such day is not a London business day,
then the immediately preceding London business day (or if not so
reported, then as determined by Bank from another recognized source
or interbank quotation).
DEFAULT
RATE. In addition
to all other rights contained in this Note, if an Event of Default
occurs, all outstanding Obligations shall bear interest at the
Interest Rate plus 3% (“Default Rate”).
The
Default Rate shall also apply from demand until the Obligations or
any judgment thereon is paid in full.
INTEREST
COMPUTATION .
(Actual/360). Interest shall be computed on the basis
of a 360-day year for the actual number of days in the interest
period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective interest yield by taking the stated
(nominal) interest rate for a year's period and then dividing said
rate by 360 to determine the daily periodic rate to be applied for
each day in the interest period. Application of the
Actual/360 Computation produces an annualized effective interest
rate exceeding that of the nominal rate.
REPAYMENT
TERMS. This Note shall be
due and payable in consecutive monthly payments of accrued interest
only, commencing on March 1, 2004, and continuing on the same day
of each month thereafter until fully paid. IN ANY EVENT,
THIS NOTE SHALL BE DUE AND PAYABLE IN FULL, INCLUDING ALL PRINCIPAL
AND ACCRUED INTEREST, ON DEMAND. This Note may be prepaid, in
whole or in part, without penalty or premium at any time; provided,
however, that nothing herein shall effect the obligations of any
Borrower under any existing or future swap agreements (as defined
in 11 U.S.C. § 101).
RESCISSION OF
PAYMENTS . If any
payment received by Bank under this Note or the other Loan
Documents is rescinded, avoided or for any reason returned by Bank
because of any adverse claim or threatened action, the returned
payment shall remain payable as an obligation of all Persons liable
under this Note or the other Loan Documents as though such payment
had not been made.
LOAN AGREEMENT;
LOAN DOCUMENTS; OBLIGATIONS . This Note
is subject to the terms and conditions of that certain Revolving
and Term Credit and Security Agreement between Bank and Borrower
dated as of the date hereof, as the same may be modified and
amended from time to time (the "Loan Agreement"). All
capitalized terms not otherwise defined herein shall have such
meaning as assigned to them in the Loan Agreement. The term
"Obligations" used in this Note refers to any and all indebtedness
and other obligations under this Note, all other Indebtedness, as
defined in the Loan Agreement, to Bank and all obligations under
any swap agreements as defined in 11 U.S.C. § 101 between Bank
or any of its affiliates and Borrower whenever executed.
LATE
CHARGE . If any
payments are not timely made, Borrower shall also pay to Bank a
late charge equal to 5% of each payment past due for 10 or more
days. The Borrower acknowledges that the late charge imposed
herein represents a reasonable estimate of the expenses of Bank
incurred because of such lateness.
Acceptance by
Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge
or to collect a late charge for any subsequent late payment
received.
ATTORNEYS' FEES
AND OTHER COLLECTION COSTS . Borrower
shall pay all of Bank's reasonable expenses incurred to enforce or
collect any of the Obligations, including, without limitation,
reasonable arbitration, paralegals', attorneys' and experts' fees
and expenses, whether incurred without the commencement of a suit,
in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.
USURY
.
Regardless of any other provision of this Note or other Loan
Documents, if for any reason the effective interest should exceed
the maximum lawful interest, the effective interest shall be deemed
reduced to, and shall be, such maximum lawful interest, and
(i) the amount which would be excessive interest shall be
deemed applied to the reduction of the principal balance of this
Note and not to the payment of interest, and (ii) if the loan
evidenced by this Note has been or is thereby paid in full, the
excess shall be returned to the party paying same, such application
to the principal balance of this Note or the refunding of excess to
be a complete settlement and acquittance thereof.
BORROWER'S
ACCOUNTS . Except as
prohibited by law, Borrower grants Bank a security interest in all
of Borrower's existing or future deposit accounts with Bank and any
of its affiliates to secure the Obligations.
EVENTS OF
DEFAULT . "Event of
Default" shall mean an Event of Default as defined in the Loan
Agreement.
REMEDIES UPON
EVENT OF DEFAULT . Upon the
occurrence of an Even
