Exhibit 10.2
HAND NOTE
MAKER: DUE:
South Louisiana Ethanol LLC Not later than October 22, 2008 or
NOTE NUMBER: HN 0001 earlier upon the first to occur of:
ADDRESS: 1. Refinance or restart of the SLE
South Louisiana Ethanol LLC Project, or
278 E. Ravenna 2. Initiation of any action or proceeding
Belle Chasse, LA 70037 to foreclose any 3rd party interest upon
any of the SLE projectassets or property
pledged as collateral security for
repayment of this Note or any related
obligation
BEARER:
PRINCIPAL SUM:
ENGlobal Engineering, Inc.
$12,329,343.53
ADDRESS:
654 N. Sam Houston Pkwy E.,
Suite 400 Houston, Texas 77060
DATE: October 22, 2007
MATURITY DATE: October 22, 2008
For value received, South Louisiana Ethanol LLC, on or after October 22,
2007 jointly, severally, and in solido, promises to pay to the order of ENGlobal
Engineering, Inc., or Bearer at Houston, Texas, twelve-million, three hundred
twenty-nine thousand, three hundred and forty-three and 53/100 dollars
($12,329,343.53), (initially the "Principal Sum", thereafter, as interest
accrues, or prepayments of principal are made, the "Principal Balance") with
interest thereon at the rate of ten percent per annum (10%), from October 22,
2007 until paid.
Payment of Interest. Interest shall accrue at the rate of ten percent (10%)
per annum on the unpaid Principal Balance of this Hand Note (the "Note") from
time to time outstanding. Interest shall be calculated on the basis of a 360 day
year against the actual number of days elapsed between payments, and shall be
payable in quarterly installments of interest only ("Quarterly Interest
Payment") on the 22d day of every third month commencing January 22, 2008 (each
a "Quarterly Interest Payment Date"). Payments of Interest only on the
outstanding Principal Balance shall be due and payable on each Quarterly
Interest Payment Date; provided that, in the event the Maker elects, at its
option, to forgo any Quarterly Interest Payment, then such Quarterly Interest
Payment shall be deemed to be deferred, and the amount of such Deferred
Quarterly Interest Payment, shall itself accrue interest at the rate of fifteen
percent ( 15%) per annum to the Maturity Date, when it must be paid in currency
or its equivalent, along with the Principal Balance and other accrued interest,
if not sooner paid. Any such Quarterly Interest Payment not made and so accrued
to the Maturity Date as provided herein shall be known as a "Deferred Quarterly
Interest Payment."
Maturity. The Maker shall pay the Principal Sum of $12,329,343.53 (or such
greater or lesser principal amount then outstanding), together with all accrued
and unpaid interest on the principal amount being repaid, to ENGlobal
Engineering, Inc., or Bearer, on or before October 22, 2008 (the "Maturity
Date").
Conversion. Upon the Maturity Date, and provided there has been no prior
default by Maker, and all Deferred Quarterly Interest Payments and accrued
interest are then paid, and provided there has been no Refinance or restart of
the SLE Project or initiation of any proceeding to foreclose any third party
interest upon any of the Collateral Property Assets pledged as security for this
Note, and further provided that Maker shall pledge such additional substitute
collateral security and executed such additional security pledge instruments
acceptable to Bearer, in its sole discretion, then and in that event, the
Principal Balance then outstanding , shall, upon written notice from Maker,
delivered in writing to Bearer 15 days prior to Maturity Date, be Convertible as
follows: The Principal Balance then outstanding shall be evidenced as the
Principal Balance of a New Promissory Note in substantially the same form as
this Note, payable in equal monthly installments calculated at 12% annum on a 20
year amortization, with a balloon payment of the entire unpaid amount of
principal and all accrued interest being due on 22d day of the 24th month from
the Maturity Date hereof, and no later than October 22, 2010.
COLLATERAL DESCRIPTION:
TRACT A-1C
A CERTAIN PORTION OF GROUND located in Alliance and St. Rosalie
Plantation, Section 5, T16S, R25E; Southeast District of Louisiana,
West of the Mississippi River, Plaquemines Parish, Louisiana in an
area bounded by La. State Highway No 23, the Mississippi River, above
by Citrus Lands of Louisiana, and below by La. Power & Light Co.,
designated as Tract A-1C and described as follows:
Commence from the intersection of the upper line of La. Power &
Light Co. Property and the original easterly right of way line of La.
State Highway 23 said point having coordinates X=2,430,858.48,
Y=366,504.59 and go North 21(degree)56'19" West a distance of 416.07;
thence go North 69(degree)07'01" East a distance of 2111.83 feet to
the POINT OF BEGINNING. Thence continue North 69(degree)07'01" East a
distance of 210.64 feet; thence go of North 20(degree)52"59" West a
distance of 1301.27 feet; thence go of North 69(degree)07'01" East a
distance of 1221.80 feet; thence go of South 24(degree)30'41" East a
distance of 95.98 feet; thence go of South 20(degree)53'09" East a
distance of 505.11 feet; thence go of South 13(degree)29'42" East a
distance of 159.40 feet; thence go of South 29(degree)50'59" East a
distance of 220.75 feet; thence go of South 20(degree)49'56" East a
distance of 332.00 feet; thence go of North 69(degree)07'01" East a
distance of 170.23 feet; thence go of South 20(degree)43'33" East a
distance of 358.55 feet; thence go of South 69(degree)08'57" West a
distance of 1397.84 feet; thence go of North 20(degree)47'37" West a
distance of 222.20 feet; thence go of North 63(degree)58'24" West a
distance of 55.28 feet; thence go of South 69(degree)12'23" West a
distance of 186.13 feet; thence go of North 20(degree)52'59" West a
distance of 102.66 feet to the POINT OF BEGINNING.
All as shown on a plan of resubdivision of Dufrene Surveying &
Engineering Inc. dated July 3, 2006 and containing 48.9831 acres.
And: All other personal property assets of SLE LLC including all
moveable and immovable property, equipment, fixtures, contract rights,
accounts, etc.
DEFAULT - Upon the death, suspension, failure, or insolvency, however
evidenced, of any party hereto, or if proceedings for voluntary of involuntary
bankruptcy or for any readjustment of indebtedness, reorganization, composition,
or extension under any bankruptcy or insolvency law be brought by or against any
party hereto, or if any party hereto files proceedings for a respite or makes a
general assignment for the benefit of creditors, or if a receiver of all or any
part of the property of any party hereto to be applied for or appointed, or if
proceedings for the benefit of creditors, or if a receiver of all or any part of
the property of any party hereto to be applied for or appointed, or if
proceedings for the dissolution or the appointment of a liquidator of any party
herein are commenced, or if any party hereto be in default with respect to any
promise herein contained or with respect to any of the aforesaid other debts,
liabilities, or obligations of the parties hereto or any of them to ENGlobal
Engineering, Inc., or Bearer then, and in any of said events this note and each
and every one of the aforesaid other debts, liabilities, and obligations to the
ENGlobal Engineering, Inc., or Bearer of the parties hereto, and each of them,
shall, without any notice, demand or putting in default whatsoever, unless
ENGlobal Engineering, Inc., or Bearer shall otherwise elect, be forthwith due
and payable.
The parties hereto bind themselves to pay the fees of any attorney at law
who may be employed to recover the amount hereof, or any part hereof, in
principal or interest, or to protect the interests of the holder hereof or to
compromise or to take any other action with regard hereto, which fees are hereby
fixed at twenty-five (25%) percent of the amount then owing hereon and sought to
be collected protected or preserved.
All parties hereto severally waive presentment for payment, demand,
protest, and notice of protest and non-payment and also pleas of division and
discussion, and agree that the payment hereof may be extended from time to time,
one or more times, without notice, hereby binding themselves in solido
unconditionally and as original makers and promisors for the payment hereof in
principal, interest, costs, and attorney fees.
ENGlobal Engineering, Inc., or Bearer may at any time release any of the
parties hereto, in whole or in part, from their obligations hereunder without in
any manner affecting or impairing the rights of ENGlobal Engineering, Inc., or
Bearer against all other parties hereto not so released. All parties hereto
severally consent and agree that any or all of the aforesaid securities and/or
property may be exchanged or surrendered or otherwise dealt with from time to
time without notice to or assent from any party hereto and without in any manner
releasing or altering their obligations hereunder.
No delay on the part of ENGlobal Engineering, Inc., or Bearer in exercising
any power or right hereunder shall operate as a waiver of any such power or
right nor shall any single or partial exercise of any power or right hereunder
preclude other or further exercise thereof or the exercise of any other power or
right hereunder.
As used herein, the term "parties hereto" shall be deemed to include not
only the maker or makers hereof but also any endorser or endorsers, surety or
sureties, and guarantor or guarantors.
All parties hereto further severally agree that this note evidences and
sets forth their entire agreement with the holder hereof and that no
modification hereof shall be binding unless in writing and signed by the parties
hereto.
PREPAYMENT - This Note may be prepaid in full at any time prior to
scheduled maturity, without penalty. Maker further acknowledges receipt of a
copy of this Note and disclosure statement.
/s/
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South Louisiana Ethanol LLC, MAKER