REVOLVING LINE OF CREDIT NOTE WORKING CAPITAL
Exhibit
10.4
WORKING
CAPITAL
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$8,500,000.00
U.S.
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December 27, 2005
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FOR
VALUE
RECEIVED, the undersigned, VeriChip Corporation, a Delaware corporation with
a
principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Borrower”), hereby promises to pay to the order of
Applied Digital Solutions, Inc., a Missouri corporation located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Lender”), at such
address, or such other place or places as the holder hereof may designate in
writing from time to time hereafter, the maximum principal sum of Eight Million
Five Hundred Thousand Dollars ($8,500,000.00), or, if less, so much thereof
as
may be advanced or readvanced by the Lender to the Borrower pursuant to the
terms of the Loan Agreement (as hereinafter defined), together with interest
as
provided for hereinbelow, in lawful money of the United States of America.
Interest
shall be calculated and charged daily on the basis of actual days elapsed over
a
three hundred sixty (360) day banking year, on the unpaid principal balance
outstanding from time to time at a variable rate equal to the Prime Rate of
interest (the “Prime Rate”), expressed as a percentage as it exists from time to
time. The Prime Rate means the highest Prime Rate of interest as published
in
the Wall Street Journal from time to time.
The
Borrower shall make a balloon payment of principal, interest and any fees or
expenses outstanding on December 27, 2010 (the “Maturity Date”) unless a
change of ownership or management occurs, as defined in Section IX. C. of the
Loan Agreement as defined below, or an initial public offering of the Borrower’s
common stock is consummated, in which case the Borrower shall, within two
business days of such event, repay in full all principal, interest and any
fees
or expenses outstanding hereunder.
The
Note
is issued under, and is subject to, the Commercial Loan Agreement of even date
between the Borrower and the Lender, as it may be amended from time to time
(the
“Loan Agreement”). The holder of this Note is entitled to all of the benefits
and rights of the Lender under the Loan Agreement. However, neither this
reference to the Loan Agreement nor any provision thereof shall impair the
absolute and unconditional obligation of the undersigned to pay the principal
and interest on this Note as herein provided. Any capitalized term used in
this
Note that is not otherwise expressly defined herein shall have the meaning
ascribed thereto in the Loan Agreement.
The
holder may impose upon the undersigned a delinquency charge of $35.00 or five
percent (5.00%) of the amount of the principal and/or interest payment not
paid on or before the thirtieth (30th) day after such installment is due,
whichever is greater. The entire principal balance hereof, together with accrued
interest, shall after maturity, whether by demand, acceleration or otherwise,
bear interest at the contract rate of this Note plus an additional three percent
(3.00%) per annum. Upon default by Borrower under the terms of this Note or
any other Loan Documents, interest shall accrue at a variable rate equal to
the
contract rate of this Note plus three percent (3.00%).
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2
The
undersigned agrees to pay on demand all reasonable out-of-pocket costs of
collection hereof, including court costs, service fees, and reasonable
attorney’s fees, whether or not any foreclosure or other action is instituted by
the holder in its discretion.
The
word
“holder”, as used in this Note, shall mean the payee or endorsee of this Note
who is in possession of it, or the bearer, if this Note is at that time payable
to the bearer.
The
indebtedness evidenced by this Note is secured by the Loan Documents as defined
in the Loan Agreement. Any default by the undersigned under the Loan Documents
shall constitute a default under this Note entitling the holder to declare
the
entire principal amount of the indebtedness evidenced hereby, together with
all
accrued interest thereon, immediately due and payable.
No
delay
or omission on the part of the holder in exercising any right, privilege or
remedy shall impair such right, privilege or remedy or be construed as a waiver
thereof or of any other right, privilege or remedy. No waiver of any right,
privilege or remedy or any amendment to this Note shall be effective unless
made
in writing and signed by the holder. Under no circumstances shall an effective
waiver of any right, privilege or remedy on any one occasion constitute or
be
construed as a bar to the exercise of or a waiver of such right, privilege
or
remedy on any future occasion. The acceptance by the holder hereof of any
payment after any default hereunder shall not operate to extend the time of
payment of any amount then remaining unpaid hereunder or constitute a waiver
of
any rights of the holder hereof under this Note.
All
rights and remedies of the holder, whether granted herein or otherwise, shall
be
cumulative and may be exercised singularly or concurrently, and the holder
shall
have, in addition to all other rights and remedies, the rights and remedies
of a
secured party under the Uniform Commercial Code of New Hampshire. The holder
shall have no duty as to the collection or protection of the Collateral or
of
any income thereon, or as to the preservation of any rights pertaining thereto
beyond the safe custody thereof. Surrender of this Note, upon payment or
otherwise, shall not affect the right of the holder to retain the Collateral
as
security for the payment and performance of any other liability of the
undersigned to the holder.
Every
maker, endorser, or guarantor of this Note, or the obligations represented
by
this Note, waives all exemption rights, valuation and appraisement, presentment,
protest and demand, demand for payment, notice of dishonor and protest and
all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of Collateral, and/or to the addition or
release of any other party or person primarily or secondarily liable.
This
Note
may be prepaid in whole or in part without penalty.
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3
This
Note
and the provisions hereof shall be binding upon the undersigned and the
undersigned’s heirs, administrators, executors, successors, legal
representatives and assigns and shall inure to the benefit of the holder, the
holder’s heirs, administrators, executors, successors, legal representatives and
assigns.
This
Note
may not be amended, changed or modified in any respect except by a written
document that has been executed by each party. This Note constitutes a New
Hampshire sealed instrument and contract to be governed by the laws of such
state and to be paid and performed therein.
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IN
THE PRESENCE OF:
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VeriChip
Corporation
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/s/
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By:
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/s/
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Name:
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▇▇▇▇▇
▇▇▇▇▇▇
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Title:
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Chief
Financial Officer
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