EXHIBIT 10.1
Promissory Note dated March 29, 2000
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THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE UNIFORM ARBITRATION
ACT, SECTION 15-48-10, ET SEQ., CODE OF LAWS OF SOUTH CAROLINA, 1976 (AS
AMENDED)
PROMISSORY NOTE
$700,000.00 Charleston, South Carolina
March 29, 2000
* * * * * * * * * *
FOR VALUE RECEIVED, the undersigned, LIGHTTOUCH VEIN & LASER OF SOUTH
CAROLINA, INC., a South Carolina Corporation, with an office at 00000 Xxxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxx ("Maker"), hereby promises and agrees to pay to the order
of XXXXXX X. XXXXXXXXXX, M.D., d/b/a THE CHARLESTON DERMATOLOGY AND COSMETIC
SURGERY CENTER ("Payee") at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000, the aggregate principal sum of SEVEN HUNDRED THOUSAND AND 00/100 DOLLARS
($700,000.00), without interest thereon as hereinafter provided, in lawful money
of the United States of America, as hereinafter provided.
The principal of this Promissory Note shall bear no interest on the unpaid
balance.
Principal shall be due and payable in two (2) installments. Provided, the
business formally known as "The Charleston Dermatology and Cosmetic Surgery
Center" which has been purchased by the Maker shall maintain a cash flow, of not
less than $400,000.00 for the period beginning January 1, 2000 and ending
December 31, 2000, Maker shall pay to Payee (i) the first installment of
principal in the amount of $200,000.00 on or before the date which is twelve
(12) months from the date hereof and (ii) the second installment of principal in
the amount of $500,000.00 on or before the date which is twenty-four (24) months
from the date hereof. For purposes of this Section, cash flow shall be measured
at the end of each such twelve (12) and twenty-four (24) month period and shall
be calculated as net income, including facility rental income calculated using
the accrual method of accounting subject to the rules and provisions of
Generally Accepted Accounting Principles (GAAP) before income taxes and Payee's
total compensation for the period being reported. Cash flow shall be determined
by the certified public account (CPA) for the Maker according to GAAP. If the
CPA determines that the cash flow for the above stated period is less than
$400,000.00 then this Note shall automatically renew for successive twelve (12)
and twenty-four (24) month periods, without interest, until the required cash
flow is attained within a fiscal year (the "Maturity Date"). By way of example,
should the cash flow be less than the required $400,000.00 for the twelve (12)
month period ending 3/31/2001, but shall be at least $400,000.00 for twelve (12)
month period ending 3/31/2002, then the Principal would be due two (2)
installments on the anniversary date of this Note in 2002 and 2003.
Principal payments shall be made at the Payee's address above unless otherwise
designated by Payee in writing.
The principal balance may be prepaid at any time in whole or in part without
premium or penalty. Any and all prepayments shall be applied to the payment of
the principal of this Promissory Note
Events of Default:
This Promissory Note shall be and become immediately due and payable at the
option of Payee, without any demand or notice whatsoever, upon the occurrence of
any of the following described events, each of which shall constitute an Event
of Default:
Charleston: 181926 v.9
(1) Any failure to make any payment when due of any principal installment
on this Promissory Note (whether upon demand at maturity or by
acceleration) or the failure to perform any other obligation of Maker
to Payee.
(2) The dissolution of Maker of this Promissory Note.
(3) The creation of any lien (except a lien to Payee) or the issuance of an
attachment against or seizure of any of the property of Maker.
(4) An assignment for the benefit of the creditors of, or the commencement
of any bankruptcy, receivership, insolvency, reorganization, or
liquidation proceedings by or against Maker of this Promissory Note.
(5) An event of default under any other document evidencing or securing
this Note, including, without limitation, a breach or default of any
agreement, covenant or provision under that certain Asset Purchase
Agreement dated March ___, 2000, between Maker and Payee and that
certain Security Agreement dated of even date herewith by Maker in
favor of Payee (the "Transaction Documents").
(6) Entry of a judgment against Maker.
(7) Any representation or warranty of Maker in any of the Transaction
Documents is or was untrue or misleading.
Upon the occurrence of an Event of Default herein described, Payee may, at its
option, declare this Note to be fully due and payable plus any fees and charges
and exercise any or all other remedies provided for at law or in equity. To the
extent permitted by law, any unpaid principal shall accrue interest at the rate
of 18% per annum (the "Default Rate"). The provisions for a Default Rate shall
not be deemed to extend the time for payment hereunder or to give Maker a right
to cure any default. Maker shall pay all costs of collection incurred by Payee,
including his attorney's fees, if this Promissory Note is referred to an
attorney for collection, whether or not payment is obtained before entry of
judgment. No failure on the part of Payee to exercise any of its rights
hereunder shall be deemed a waiver of any such rights or of any default.
Maker waives diligence, presentment for payment, protest, notice of dishonor and
of nonpayment and protest, and does hereby consent to any number of
forbearances, renewals or extensions of time of payment hereof or releases or
substitutions of all or any part of any security for payment hereof. Any notice
provided for in this Promissory Note shall be given by mailing such notice by
certified mail, return receipt requested, addressed to the party entitled to
such notice at the address identified in the first paragraph hereof, or to such
other address as either party hereto may designate in writing by notice to the
other party.
Maker agrees that there are no conditions or understandings that are not
expressed in this Promissory Note and the documents referred to herein.
The declaration of invalidity of any provision of this Promissory Note shall not
affect any part of the remainder of the provisions.
The provisions of this Promissory Note shall be binding upon and inure to the
benefit of Maker and Payee and their respective heirs, legal representatives,
successors and assigns.
This Promissory Note shall be interpreted and construed in accordance with and
governed by the laws of the State of South Carolina.
Time shall be of the essence.
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As security for the payment of this Note, Maker has caused to be granted to
Payee a security interest in all of the rights, title and interest in and to
Payee's former assets located in Charleston, South Carolina and employed in
connection with the operation of the Payee's former Business (as defined in the
Maker's and Payee's Asset Purchase Agreement, dated March ___, 2000) (the
"Agreement") (the "Assets"), under a separate security agreement executed
simultaneous with this Note.
In any litigation or arbitration in connection with or to enforce this Note or
any guaranty of this Note or any Transaction Documents, Borrower and any
guarantor irrevocably consent to and confer personal jurisdiction on the courts
of Charleston County, State of South Carolina or the United States courts
located within the State of South Carolina, and expressly waive any objections
as to venue in any such courts, and agree that service of process may be made on
Borrower and any guarantor by mailing a copy of the summons and complaint by
registered or certified mail, return receipt requested, to their respective
addresses. Nothing contained herein shall, however, prevent Payee from bringing
any action or exercising any rights within any other state or jurisdiction or
from obtaining personal jurisdiction by any other means available by applicable
law.
ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT
LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS NOTE OR ANY RELATED NOTES OR
INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), AND THE "SPECIAL RULES"
SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL
CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. ANY PARTY TO THE NOTE MAY BRING AN ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS NOTE APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN CHARLESTON, SOUTH
CAROLINA PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR AN ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL BE DEEMED TO (I)
LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR
REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY PAYEE OF
THE PROTECTION AFFORDED TO IT BY AN APPLICABLE LAW; OR (III) LIMIT THE RIGHT OF
PAYEE HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO)
SETOFF, OR (B) TO FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL,
OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT
LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. PAYEE MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE.
NEITHER THE EXERCISE OR SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF
AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
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IN WITNESS WHEREOF, this Note has been executed and delivered as of the
date first set forth above.
LIGHTTOUCH VEIN & LASER OF SOUTH
CAROLINA, INC., A South Carolina Corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name: /s/ X. Xxxxxxxxxx
Title: /s/ President
PARENT GUARANTY:
The undersigned, as the parent corporation of Maker, hereby absolutely and
unconditionally guarantees to Payee the due and punctual payment of this Note
when due, together with any and all other sums, charges and fees due hereunder
up to Twenty Thousand and no/100 Dollars ($20,000.00). The obligation of the
undersigned guarantor is a guarantee of payment and not of collection.
LIGHTTOUCH VEIN & LASER, INC., a Nevada
corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Its: /s/ President
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