EXHIBIT 10.46
$3,000,000.00 April 26, 2002
Boca Raton, Florida
PROMISSORY NOTE
FOR VALUE RECEIVED, CAPITOL COMMUNITIES CORPORATION, A NEVADA
CORPORATION, (the "Maker") hereby promises to pay to the order of BOCA
FIRST CAPITAL LLLP, A FLORIDA LIMITED LIABILITY LIMITED PARTNERSHIP (the
"Lender"), at 900 North Federal Highway, Suite 410, Boca Raton, FL 33432,
or at such other place as the holder hereof may from time to time designate
in writing, the principal sum of THREE-MILLION AND NO/100 DOLLARS
($3,000,000.00), together with interest at the rate hereinafter specified
on such indebtedness as shall from time to time remain unpaid, until paid
in full, such principal and interest being payable in lawful money of the
United States which shall be legal tender in payment of all debts at the
time of payment.
Interest on the unpaid principal sum outstanding from time to
time shall accrue at the initial rate of FIVE AND THREE-QUARTERS PERCENT
(5.75%) PER ANNUM. Effective on the first business day of the first
calendar quarter after the date of this Note, and on the first business day
of each succeeding calendar quarter, the rate of interest on this Note will
increase or decrease to a rate of one percent (1.0%) above the Prime Rate,
as published in The Wall Street Journal, in effect on that date; provided
that such rate of interest shall never exceed ten percent (10%) per annum.
Interest, throughout the term of this Note shall be calculated on the basis
of actual days elapsed divided by 360.
This Note shall be payable in MONTHLY INSTALLMENTS OF INTEREST
ONLY on the 1st day of each calendar month commencing on the 1st day of
June, 2002, and continuing thereafter from month to month until the 1st day
of November, 2003 whereupon the entire outstanding principal balance of
this Note together with accrued but unpaid interest shall become all due
and payable.
All payments made hereunder shall be applied first to the
interest accruing upon the terms of this Note, next to charges, costs, or
expenses then due under this Note, the Security Agreements (as hereinafter
defined), or any other loan documents, and the balance, if any, to
principal.
If any payment to be made by Maker to Lender according to the
terms hereof shall be due on a Saturday, Sunday or other day which is a
legal holiday under the laws of the State of Florida, the due date for such
payment shall be extended to the next business day and the amount of such
payment shall include interest accrued during such extension.
If any payment is more than ten (10) days late, Maker agrees to
pay to Lender a late charge equal to five percent (5%) of the payment.
This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Maker or as provided in this
paragraph. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's office
shown above. The following party or parties are authorized as provided in
this paragraph to request advances under the line of credit until Lender
receives from Maker at Lender's address shown above written notice of
revocation of their authority: MICHAEL G.TODD, Maker agrees to be liable
for all sums either; (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Maker's accounts with Lender.
The unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (a) Maker or any guarantor is in default
under the terms of this Note or any agreement that Maker or any guarantor
has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business
or is insolvent; (c) any guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such guarantor's guarantee of this Note or any
other loan with Lender; (d) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender; or (e) Lender
in good faith deems itself insecure under this Note or any other agreement
between Lender and Borrower. Notwithstanding anything to the contrary
contained in this Note, the outstanding principal balance of this Note,
including all advances hereafter made, shall never exceed the original
principal amount hereof.
This Note is secured by a collateral assignment and pledge of
the capital stock of Capitol Development of Arkansas, Inc. (the "Security
Agreement") of even date herewith made by Maker in favor of Lender. This
Note is subject to the provisions of that certain Business Loan Agreement
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("Loan Agreement") dated the date hereof and entered into by and between
Maker and Lender (including, without limitation, section 3 "Default;
Forbearance; Termination of Forbearance" of Exhibit "A" to the Loan
Agreement).
This Note may be prepaid, in whole or in part, at any time
without penalty. All prepayments made hereunder shall be applied as
follows: (a) first against accrued interest then due and owing; (b) next to
amounts expended by Lender to cure any default under this Note, the
Security Agreements or any other loan documents executed in connection
herewith; (c) next to costs, expenses, or attorneys' fees due and payable
to Lender pursuant to this Note, the Security Agreements, or any other loan
documents executed in connection herewith; and (d) thereafter against the
principal. The making of any prepayment shall not relieve Maker from the
obligation to make the payments next due hereunder on a timely basis.
Each and every party to this Note, whether as Maker, endorser,
surety, guarantor or otherwise ("Obligor"), hereby waives all rights of
homestead and other exemptions granted by the constitution or laws of
Florida, and further waives presentment, demand, protest and notice of
dishonor, notice of nonpayment, notice of protest, and diligence in
collection, and assents to the terms hereof and to any extension or
postponement of the time for payment or any other indulgence. It is further
specifically agreed that this Note or any part of the principal or interest
due hereon may be renewed, modified or extended, in whole or in part, such
modification to include but not be limited to changes in payment schedules
and interest rates, from time to time by the Note holder at the request of
any party bound hereon or who has assumed or who may hereafter assume
payment hereof, without the consent of or notice to other parties bound
hereon and without releasing them from any liabilities then existing.
Each and every Obligor hereby consents that the real or personal
property securing this Note, or any part of such security, may be released,
exchanged, added to or substituted for by Lender, without in any way
modifying, altering, releasing, affecting or limiting their respective
liabilities or the lien of the Security Agreement, and further agrees that
Lender shall not be required first to institute any suit, or to exhaust any
of its remedies against or any other person or party liable or to become
liable hereunder, in order to enforce payment of this Note, and further
agrees that Maker or any other party liable hereunder may be released by
Lender from any or all liability under this Note and such release shall in
no way affect or modify the liability of the remaining parties hereto.
Each and every Obligor hereby consents and agrees that he is
bound, jointly and severally, under the terms hereof and is subject to all
of the provisions set forth herein as fully as though each was an
undersigned hereof, and further consents and agrees that any Obligor may be
sued by Lender without joining any other Obligor, whether primarily or
secondarily liable.
Notwithstanding anything contained herein to the contrary or in
the Security Agreement, or other loan documents executed in connection
herewith, no payee or holder of this Note shall ever be entitled to
receive, collect or apply as interest on the obligation evidenced hereby
any amount in excess of the maximum rate of interest permitted to be
charged by applicable law and, in the event Lender or any holder hereof
ever receives, collects, or applies as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction
of the principal sum; and if the principal sum is paid in full, any
remaining excess shall forthwith be paid to Maker. In determining whether
or not the interest paid or payable under any specific contingency exceeds
the highest lawful rate, Maker and Lender shall, to the maximum extent
permitted under applicable law: (a) Characterize any non-principal payment
as an expense, fee or premium rather than as interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) spread the total
amount of interest, or charges in the nature of interest, pursuant to
applicable law.
It is expressly agreed that if any payment due hereunder is not
made in full within fifteen (15) days after the same is due, or if any
default occurs in any of the Security Agreement, the Loan Agreement, or in
any other loan document executed in connection herewith, then or at any
time thereafter at the option of Lender, the whole of the principal sum
remaining unpaid hereunder, together will all accrued and unpaid interest
thereon, shall become due and payable immediately without notice, anything
contained therein to the contrary in any way notwithstanding, and in any
such event Lender shall have the right to set-off against this Note, all
money owed by Lender in any capacity to any Obligor, whether or not due,
and Lender shall be deemed to have exercised such right of set-off and to
have made a charge against any such money immediately upon the occurrence
of such default although made or entered on the books subsequent thereto.
From and after acceleration of the loan pursuant to this paragraph, the
interest rate on the entire outstanding principal balance hereunder shall
accrue at the highest rate permitted to be charged by applicable law.
Obligor shall also be obligated to pay as part of the indebtedness
evidenced by this Note, all costs of collection, whether or not suit is
brought, including any reasonable attorneys' fees that may be incurred in
the collection and enforcement hereof. The term "attorneys' fees" shall
include, but not be limited to, any such fees incurred in any appellate or
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related ancillary or supplementary proceedings, whether before or after
final judgment related to the enforcement or defense of this Note.
If any time any federal, state, county, or municipal government
or agency thereof shall impose any documentary stamps tax, intangible tax,
or any other type of tax upon this Note or the Security Agreement, or upon
the indebtedness evidenced hereby (other than any federal, state or local
income tax imposed upon Lender), then Maker shall pay same within ten (10)
days after demand by Lender, together with any interest and penalties
thereon.
Maker shall be in default under this Note upon the happening of
any of the following events or conditions: (a) failure or omission to pay
when due this Note (or any installment of principal or interest hereunder)
or default in the payment or performance of any obligation, covenant,
agreement or liability contained or referred to in this Note, the Security
Agreement, the Loan Agreement, or any other loan document executed in
connection herewith; (b) any warranty, representation or statement made or
furnished to Lender to make the loan evidenced by this Note proves to have
been false in any material respect when made or furnished; (c) the default
by Maker in the payment or performance of any obligation, covenant,
agreement, or liability contained in any other mortgage, note, obligation
or agreement held by Lender; (d) the dissolution, termination of existence,
insolvency, or business failure of any Obligor, appointment of a receiver
for any part of the property covered by any of the Security Agreements,
assignment for the benefit of the creditors of any Obligor, or the
commencement of any proceedings in bankruptcy or insolvency by or against
any Obligor; (e) the determination by Lender that a material adverse change
has occurred in the financial condition of any Obligor from the conditions
set forth in the most recent financial statement of such Obligor heretofore
furnished to Lender or from the condition of such Obligor as heretofore
most recently disclosed to Lender in any manner; (g) falsity in any
material respect of, or any material omission in any representation or
statement made to Lender by or on behalf of any Obligor in connection with
the loan evidenced by this Note. Any default hereunder shall constitute a
default under any other mortgage, note, obligation or agreement of each
Obligor held by Lender.
Time is of the essence of this Note. The remedies of Lender as
provided herein or in the Security Agreement, or any other loan document
executed in connection herewith, shall be cumulative and concurrent, and
may be pursued singularly, successively or together, at the sole discretion
of Lender, and may be exercised as often as occasion therefor shall arise.
No act or omission of Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of such right, remedy or recourse and any waiver or release may be
effected only through a written document executed by Lender and then only
to the extent specifically recited therein. A waiver or release with
respect to any one event shall not be construed as continuing as a bar to,
or as a waiver or release of, any subsequent right, remedy or recourse as
to any subsequent event.
The term "Lender" where used herein shall include BOCA FIRST
CAPITAL LLLP, A FLORIDA LIMITED LIABILITY LIMITED PARTNERSHIP, its
successors and assigns. The term "Maker" shall include each person signing
this Note, jointly and severally, and their respective heirs, successors
and assigns. The term "Obligor" shall include Maker and every person who is
an endorser, guarantor or surety of this Note, or who is otherwise a party
hereto, and their respective, heirs, successors and assigns. The terms
"person" and "party": shall include individuals, firms, associations, joint
ventures, partnerships, estates, trusts, business trusts, syndicates,
fiduciaries, corporations, and all other groups or combinations. This Note
shall be governed by and construed in accordance with laws of the State of
Florida.
IN WITNESS WHEREOF, Maker has caused this Note to be duly
executed and delivered as of the day and year first above written.
CAPITOL COMMUNITIES CORPORATION,
a Nevada corporation,
By: /s/ Michael G. Todd
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Michael G. Todd, President
(Corporate Seal)
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