EXHIBIT 10.13
PROMISSORY NOTE
$250,000.00 Columbus, Ohio
May 10, 1996
FOR VALUE RECEIVED, the undersigned, D.P.E.C., Inc., an Ohio
corporation having offices at 1679 Old Henderson Road, Columbus, Ohio 43220 (the
"Borrower"), promises to pay to the order of Fran Papalios, an individual
residing in Ohio and having a mailing address of 4170 Waddington Road, Columbus,
Ohio 43220 (the "Payee"), at Payee's address as set forth herein, or at such
other place as the holder hereof may from time to time in writing designate, the
principal sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00),
together with interest, payable as stated herein.
Principal and interest hereunder shall be due and payable as
follows:
(1) Interest shall accrue on the unpaid principal balance
evidenced hereby, shall be calculated daily on the basis of the actual number of
days elapsed, shall be computed on the basis of a 360-day year, and interest
only shall be paid quarterly in arrears commencing on July 1, 1996, and
continuing on the first day of each consecutive October, January, April and July
thereafter, through and including July 1, 1998;
(2) Commencing on the date hereof and continuing through the
Maturity Date (as hereinafter defined), the interest rate hereunder shall be a
fixed rate of interest equal to eight percent (8.0%) per annum except as
otherwise provided in item (3) below:
(3) After the occurrence of any Event of Default (as
hereinafter defined) and until such time as there has been a cure of any such
Event of Default, interest hereunder shall accrue at a fixed rate of interest
equal to ten percent (10.0 %) per annum (the "Default Rate");
(4) Commencing on October 1, 1998, and continuing quarterly on
the first day of each consecutive January, April, July and October thereafter,
through and including April 1, 2001, principal and interest payments each in the
aggregate amount of Twenty-Five Thousand Three Hundred Ninety-Four and 61/100
Dollars ($25,394.61) shall be due and payable; and
(5) The entire unpaid principal balance evidenced by this
Note, together with any and all accrued but unpaid interest hereunder, shall be
due and payable in full on or prior to April 1, 2001 (the "Maturity Date").
The indebtedness evidenced hereby may be prepaid in whole or
in part without payment of any premium or penalty of any kind. All payments and
prepayments received by the Payee shall be (a) applied first to the payment of
all accrued but unpaid interest hereunder and then to principal due and payable
hereunder, and (b) in lawful money of the United States.
At the option of the Payee or any other holder or holders
hereof, the entire unpaid principal balance of this Note, together with all
other sums payable in accordance with this Note, shall become due and payable
immediately, upon notice or demand, upon the occurrence of any of the following
events (each, an "Event of Default"): (a) the Borrower fails to pay any
installment of principal or interest payable in accordance with this Note within
ten (10) days after its receipt of notice from Payee that such payment has not
been paid when due; (b) the Borrower fails to pay any other sum payable in
accordance with this Note within thirty (30) days after its receipt of written
notice from Payee that such payment has not been paid when due; (c) the Borrower
becomes insolvent or a receiver or custodian, as those terms are defined under
the Bankruptcy Code of 1978, as amended, Title 11, U.S.C. (the "Bankruptcy
Code"), is appointed or exists for the Borrower or any of the Borrower's
property; (d) the Borrower makes any assignment for the benefit of creditors or
any petition initiating any case is filed by or against the Borrower under any
applicable chapter of the Bankruptcy Code and any such petition is not dismissed
within sixty (60) days; or (e) the Borrower breaches the terms of the Second
Amended and Restated Shareholders Agreement, the Registration Rights Agreement,
the Noncompetition Agreement or the Pledge and Security Agreement to which the
Borrower and the Payee are parties and fails to cure such breach within the time
period provided for cure therein or, in the absence of such a provision, within
ten (10) days after its receipt of notice from Payee specifying the act or
omission constituting the breach.
If an Event of Default occurs, then the whole or any part of
the unpaid indebtedness evidenced hereby shall, at once or at any time
thereafter, at the option of the Payee or any other holder or holders hereof,
become due and payable, upon notice or demand therefor to the Borrower. A
failure of the Payee or any other holder hereof to insist upon strict compliance
with the terms hereof or to assert any right hereunder shall not be a waiver of
any Event of Default, and shall not be deemed to constitute a modification of
the terms hereof or to establish any claim or defense of the Borrower.
The Borrower, for itself and any and all other persons or
entities now or hereafter liable, primarily or secondarily, for the payment of
the indebtedness evidenced hereby, agrees that the local laws of the State of
Ohio shall govern all of the rights and duties hereunder and the construction
and effect hereof. However, if any provision hereof is or becomes invalid or
unenforceable under any law of mandatory application, it is the intent of the
Borrower, the Payee and all other persons or entities primarily or secondarily
liable hereunder that such provision will be deemed severed and omitted
herefrom, with the remaining portions hereof to remain in full force and effect
as written.
The obligations of the Borrower under this Note are secured by
a pledge of treasury shares of the Borrower under a separate Pledge and Security
Agreement.
This Note is subject to a Subordination Agreement and
Assignment for the benefit of Huntington National Bank to which the Payee and
the Borrower are parties.
IN WITNESS WHEREOF, the Borrower has executed and delivered
this Note as of the day and year first above written at Columbus, Franklin
County, Ohio.
BORROWER:
D.P.E.C., INC., an Ohio corporation
By: /s/ Carol Clark
---------------------------------
Carol Clark, its President
10/19/99 - 8575064