EXECUTION VERSION

 

 

Borrower’s Taxpayer Identification No. _____________

 

NOTE

 

$15,000,000

December 21, 2006

Charlotte, North Carolina

 

FOR VALUE RECEIVED, KMG AMERICA CORPORATION, a company incorporated under the
laws of the Commonwealth of Virginia (the “Borrower”), hereby promises to pay to
the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Lender”), at its offices
located at One Wachovia Center, 301 South College Street, Charlotte, North
Carolina (or at such other place or places as the Lender may designate), at the
times and in the manner provided in the Credit Agreement, dated as of December
21, 2006 (as amended, modified, restated or supplemented from time to time, the
“Credit Agreement”), among the Borrower and the Lender, the principal sum of
FIFTEEN MILLION DOLLARS ($15,000,000), under the terms and conditions of this
promissory note (this “Note”) and the Credit Agreement. The defined terms in the
Credit Agreement are used herein with the same meaning. The Borrower also
promises to pay interest on the aggregate unpaid principal amount of this Note
at the rates applicable thereto from time to time as provided in the Credit
Agreement.

This Note is issued to evidence the Loans made by the Lender pursuant to the
Credit Agreement. All of the terms, conditions and covenants of the Credit
Agreement are expressly made a part of this Note by reference in the same manner
and with the same effect as if set forth herein at length, and any holder of
this Note is entitled to the benefits of and remedies provided in the Credit
Agreement and the other Credit Documents. Reference is made to the Credit
Agreement for provisions relating to the interest rate, maturity, payment,
prepayment and acceleration of this Note.

In the event of an acceleration of the maturity of this Note, this Note shall
become immediately due and payable, without presentation, demand, protest or
notice of any kind, all of which are hereby waived by the Borrower.

In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys’ fees.

This Note shall be governed by and construed in accordance with the internal
laws and judicial decisions of the State of North Carolina (without regard to
the conflicts of law provisions thereof). The Borrower hereby submits to the
nonexclusive jurisdiction and venue of the federal and state courts located in
Mecklenburg County, North Carolina, although the Lender shall not be limited to
bringing an action in such courts.

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by its duly
authorized corporate officer as of the day and year first above written.

 

KMG AMERICA CORPORATION

 

 

By:

________________________________

 

Name:

________________________________

 

Title:

________________________________

 

 

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