1
EXHIBIT 10.01
CONSOLIDATED NOTE
$840,249.00 BIRMINGHAM, ALABAMA
OCTOBER 21, 1996
FOR VALUE RECEIVED, the undersigned SPRAYROQ, INC., a Florida
Corporation, ("Maker"), promises to pay to the order of ENVIROQ CORPORATION, a
Delaware corporation (hereinafter, together with any holder of this Note, the
"Holder"), at its main office in the City of Birmingham, Alabama, or at such
other address as the Holder may from time to time designate in writing, the
principal sum of Eight Hundred Forty Thousand Two Hundred Forty-Nine and No/100
Dollars ($840,249.00), together with interest thereon, with such principal and
interest to be payable as follows:
A. Commencing November 21, 1996 and on the twenty-first
(21st) day of each successive calendar month thereafter, to and
including October 21, 2001, the principal sum of this Note and accrued
interest thereon at the rate provided below shall be paid in sixty
(60) consecutive monthly payments in the amount of Five Thousand Five
Hundred Ninety and 20/100 Dollars ($5,590.20) each (representing the
amount required to repay the principal sum of this Note over an
assumed thirty (30) year term).
B. If not sooner prepaid, on October 31, 2001, Maker
shall pay to Holder the outstanding principal balance, together with
all accrued and unpaid interest. A substantial balloon payment of
principal will be due upon maturity.
The outstanding principal amount shall bear interest at a per
annum rate of interest equal to seven percent (7.00%) per annum.
All payments shall be applied first to interest then due and
payable, next to any late charges and other charges then due and owing under
this Note, and then any balance shall be applied in reduction of principal.
The principal and interest shall be payable in lawful money of the United
States which shall be legal tender for public and private debts at the time of
payment. All interest rates herein provided shall be calculated on the basis
of a 360-day year by multiplying the outstanding principal amount by the
applicable per annum rate, multiplying the product thereof by the actual number
of days elapsed, and dividing the product so obtained by 360.
Maker may prepay the outstanding principal balance of this
Note, or any part thereof, at any time and from time to time, without premium
or penalty. In addition to the scheduled installment payments described
above, the Maker shall also make mandatory prepayments of the principal balance
owing under the Note, with such mandatory prepayments to be due and payable as
follows:
1
2
In the event that Maker's net income (after provision for
taxes) for any fiscal year shall exceed $50,000 (the "Income
Benchmark"), then 50% of the amount in excess of the Income Benchmark
shall be payable as a mandatory prepayment of principal under this
Note, with such payment due 45 days after the end of the applicable
fiscal year. For example, if the net income (after provision for
taxes) for 1996 were $175,000, then the mandatory prepayment due 45
days after the end of such fiscal year would be $62,500 ($175,000
minus the $50,000 Income Benchmark equals $125,000, with such
difference multiplied by 50% to calculate the $62,500 mandatory
prepayment).
All partial prepayments, whether voluntary or mandatory, will be applied to
installments coming due in their inverse order of maturity. Amounts prepaid
may not be reborrowed. In calculating whether a mandatory prepayment has
become due and payable under this Note, the term "net income" shall be
calculated in accordance with generally accepted accounting principles,
consistently applied.
The principal sum evidenced by this Note, together with
accrued interest, shall become immediately due and payable at the option of the
Holder upon the occurrence of any of the following (each of which is an "Event
of Default"): (1) any failure to pay as and when due any installment of
principal or interest due hereunder, which failure is not cured within one
hundred twenty (120) days after written notice to the Maker of such failure;
(2) the filing by Maker of a voluntary petition in bankruptcy or Maker's
adjudication as a bankrupt or insolvent, or the filing by Maker of any petition
or answer seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself, under any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
Maker's seeking or consenting to or acquiescence in the appointment of any
trustee, receiver or liquidator of Maker or the making of any general
assignment for the benefit of creditors or the admission in writing of its
inability to pay its or his debts generally as they become due; (3) the entry
by a court of competent jurisdiction of an order, judgment, or decree approving
a petition filed against Maker seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal, state or other statute, law or regulation relating
to bankruptcy, insolvency, or other relief for debtors, which order, judgment
or decree remains unvacated and unstayed for an aggregate of ninety (90) days
(whether or not consecutive) from the date of entry thereof, or the appointment
of any trustee, receiver or liquidator of Maker or of a substantial part of its
property or of any or all of the rents, revenues, issues, earnings, profits or
income thereof without the consent or acquiescence of Maker, which appointment
shall remain unvacated and unstayed for an aggregate of ninety (90) days
(whether or not consecutive); (4) any change in the ownership of Maker except
as expressly permitted in the Stockholder Agreement dated March 25, 1992 (the
"Stockholder Agreement") among Maker, Enviroq Corporation and Replico
Development Company, Inc.; or (5) the incurring by Maker of any indebtedness
other than (a) indebtedness owing to Enviroq Corporation; (b) ordinary trade
debt incurred in the regular course of Maker's business; and (c) other
indebtedness not to exceed $20,000 in the aggregate.
2
3
Notwithstanding anything herein, any requirement of notice specified above
shall be deemed deleted if Holder is prevented from giving notice by bankruptcy
or other applicable law, and the cure period, if any, shall in such event be
measured from the date of the event or failure rather than from the date of
notice. Nothing herein shall require notice except where expressly set forth.
Maker will also pay to Holder, in addition to the amount due,
all reasonable costs of collecting, securing or attempting to collect or secure
this Note, including, without limitation, court costs and reasonable attorneys'
fees, including reasonable attorneys' fees on any appeal by either Maker or
Holder and in any bankruptcy proceedings.
If any payment is not paid within ten (10) days of the date
due, Maker agrees to pay a late charge equal to five percent (5%) of the amount
of the payment which is in default.
With respect to the amounts due pursuant to this Note, Maker
waives the following to the fullest extent permitted under applicable law:
(1) All rights of exemption of property from levy or sale
under execution or other process for the collection of debts under the
Constitution or laws of the United States or any state thereof; and
(2) Demand, presentment, protest, notice of dishonor,
notice of nonpayment, suit against any party, diligence in collection,
and all other requirements necessary to enforce this Note.
Holder shall not by any act, delay, omission, or otherwise be
deemed to have waived any of its rights or remedies, and no waiver of any kind
shall be valid unless in writing and signed by Holder. All rights and remedies
of Holder under the terms of this Note and applicable statutes or rules of law
shall be cumulative, and may be exercised successively or concurrently. Maker
agrees that there are no defenses, equities or setoffs with respect to the
obligations set forth herein. The obligations of Maker hereunder shall be
binding upon and enforceable against Maker and its successors and assigns.
Maker agrees to pay directly or reimburse Holder for its costs
(including, but not limited to, attorneys' fees and expenses) incurred in
connection with the review and preparation of the documents relating to the
consolidated loan evidenced by this Note.
This Consolidated Note amends and restates in their
entireties, and consolidates and renews the indebtedness evidenced by (a)
certain inter-company loans or accounts receivable owing by Maker to Holder,
and (b) the following promissory notes as follows:
(1) Promissory Note dated March 25, 1992, in the principal
amount of $181,143.29;
3
4
(2) Promissory Note dated March 27, 1993, in the principal
amount of $206,203.46; and
(3) Promissory Note dated March 26, 1994, in the principal
amount of $159,872.95 (the amount of the indebtedness described with respect to
the preceding Promissory Notes is the face amount payable on such Promissory
Note, and this Note consolidates all of the presently-outstanding indebtedness
(including both principal and interest) due on said Promissory Notes and on the
inter-company loans or receivables due from Maker to Holder). This Note is not
intended to, and it shall not, constitute a novation of any of the Promissory
Notes described in this paragraph or of any of the indebtedness evidenced
thereby, and this Note is to be construed and interpreted as an amendment,
restatement and consolidation of the indebtedness described in the first
sentence of this paragraph and shall not be interpreted as a new loan made in
repayment of any thereof, with the acknowledgment and understanding of Maker
that the "Loan Period" (as defined in the Stockholder Agreement) shall continue
until the indebtedness evidenced by this Note has been repaid in full.
IN WITNESS WHEREOF, the undersigned Maker has caused this
instrument to be executed by its duly authorized officer as of the day and year
first above written.
MAKER:
SPRAYROQ, INC.
By:/s/William J. Long
---------------------------------------
Its: PRESIDENT
--------------------------------------
4
5
STATE OF ALABAMA )
:
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, hereby certify that William J. Long, whose name as President of
Sprayroq, Inc., a corporation, is signed to the foregoing instrument, and who
is known to me, acknowledged before me on this day that, being informed of the
contents of the instrument, he as such officer, and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand and seal of office this 21st day of
October, A.D. 1996.
/s/Faye B. Johnston
----------------------------------------
Notary Public
[NOTARIAL SEAL]
My commission expires: July 17, 2000
-----------------
5