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THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO NEWMARKET TECHNOLOGY,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
THIS NOTE IS REGISTERED WITH THE PARENT PURSUANT TO SECTION 24(B)
OF THE SECURITY AGREEMENT. TRANSFER OF ALL OR ANY
PORTION OF THIS NOTE IS PERMITTED SUBJECT TO THE PROVISIONS SET
FORTH IN SUCH SECTION 24(B) WHICH REQUIRE, AMONG OTHER THINGS, THAT
NO TRANSFER IS EFFECTIVE UNTIL THE TRANSFEREE IS REFLECTED AS SUCH
ON THE REGISTRY MAINTAINED WITH THE AGENT PURSUANT TO SUCH SECTION
24(B).
SECURED REVOLVING NOTE
FOR
VALUE RECEIVED, each of NEWMARKET TECHOLOGY, INC., a Nevada
corporation (the “ Parent ”), and the other
companies listed on Exhibit A attached hereto (such
other companies together with the Parent, each a “
Company ” and collectively, the “
Companies ”), hereby, jointly and severally,
promises to pay to VALENS U.S. SPV I, LLC (the “
Holder ”) or its registered assigns or successors
in interest, the sum of Three Million Dollars ($3,000,000),
or, if different, the aggregate principal amount of all Loans
(as defined in the Security Agreement referred to below),
together with any accrued and unpaid interest hereon, on
November 30, 2010 (the “ Maturity Date ”)
if not sooner indefeasibly paid in full.
Capitalized
terms used herein without definition shall have the meanings
ascribed to such terms in the Security Agreement dated as of
the date hereof (as amended, restated, modified and/or
supplemented from time to time, the “ Security
Agreement ”) among the Companies, the Holder, each
other Lender and LV Administrative Services, Inc., as
administrative and collateral agent for the Lender (the
“ Agent ” together with the Lenders,
collectively, the “ Creditor Parties
”).
The
following terms shall apply to this Secured Revolving Note
(this “ Note ”):
ARTICLE I
CONTRACT RATE
1.1
Contract Rate . Subject to Sections 2.2 and 3.9,
interest payable on the outstanding principal amount of this Note
(the “ Principal Amount ”) shall accrue at a
rate per annum equal to the “prime rate” published in
The Wall Street Journal from time to time (the “
Prime Rate ”), plus two percent (2%) (the “
Contract Rate ”). The Contract Rate shall
be increased or decreased as the case may be for each increase or
decrease in the Prime Rate in an amount equal to such increase or
decrease in the Prime Rate; each change to be effective as of the
day of the change in the Prime Rate. The Contract Rate
shall not at any time be less than nine percent
(9%). Interest shall be (i) calculated on the basis of a
360 day year, and (ii) payable monthly, in arrears, commencing on
December 1, 2007 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.
1.2
Contract Rate Payments . The Contract Rate shall be
calculated on the last Business Day of each calendar month
hereafter (other than for increases or decreases in the Prime Rate
which shall be calculated and become effective in accordance with
the terms of Section 1.1) until the Maturity Date and shall be
subject to adjustment as set forth herein.
1.3
Mandatory Prepayments . Upon receipt by any Company
of any principal payment made to such Company in respect of any
Note Receivable, such Company shall immediately apply an amount
equal to fifty percent (50%) of such payment to prepay the
outstanding principal balance of the Notes, to be applied first
against the last maturing installments of the outstanding principal
amount of the Term Loan in the inverse order thereof (including any
accrued and unpaid interest thereon) until the Term Loan is paid in
full and then to the Revolving Loans (including any accrued and
unpaid interest thereon); provided , however ,
following the occurrence and during the continuance of an Event of
Default, such prepayments shall be applied to the Obligations in
such order as the Agent may elect in its sole
discretion. If more than one Note is outstanding, the
proceeds payable under this Section 1.3 shall be applied to the
Notes on a pro rata basis.
ARTICLE II
EVENTS OF DEFAULT AND DEFAULT RELATED
PROVISIONS
2.1
Events of Default . The occurrence of any Event of
Default under the Security Agreement shall constitute an event of
default (“ Event of Default ”)
hereunder.
2.2
Default Interest . Following the occurrence and
during the continuance of an Event of Default, the Companies shall,
jointly and severally, pay additional interest on the outstanding
principal balance of this Note in an amount equal to one percent
(1%) per month, and all outstanding Obligations, including unpaid
interest, shall continue to accrue interest at
such additional interest rate from the date of such
Event of Default until the date such Event of Default is cured or
waived.
2.3
Default Payment . Following the occurrence and
during the continuance of an Event of Default, the Agent may demand
repayment in full of all obligations and liabilities owing by the
Companies to the Holder under this Note, the Security Agreement
and/or any other Ancillary Agreement and/or may elect, in addition
to all rights and remedies of the Agent under the Security
Agreement and the other Ancillary Agreements and all obligations
and liabilities of each Company under the Security Agreement and
the other Ancillary Agreements, to require the Companies, jointly
and severally, to make a Default Payment (“ Default
Payment ”). The Default Payment shall be one
hundred fifteen percent (115%) of the outstanding pr
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