EXHIBIT 10.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
PROMISSORY NOTE
$1,513,000.00 April 13, 2006
FOR VALUE RECEIVED, Incentra Solutions, Inc., a Nevada corporation (the
"Company") and any successor corporation to the Company, hereby promises to pay
to the order of XXXXXX X. XXXXXXXX and his assigns (together with his assigns,
"Payee"), the principal amount of One Million Five Hundred Thirteen Thousand
Dollars ($1,513,000.00) on the terms set forth below. The Company promises to
pay interest on the principal amount of this Note in arrears from and including
the date hereof on the principal balance from time to time outstanding, computed
daily, at an annual rate of one-half percent (1/2%). Interest shall be
calculated on the basis of actual number of days elapsed over a year of 360
days. Notwithstanding any other provision of this Note, the holder hereof does
not intend to charge and the Company shall not be required to pay any interest
or other fees or charges in excess of the maximum permitted by applicable law;
any payments in excess of such maximum shall be refunded to the Company or
credited to reduce principal hereunder. The Company may prepay any or all
principal and accrued interest due under this Note at any time, upon ten (10)
days prior notice to holder, without penalty.
Eight equal payments of principal and interest in the amount of One
Hundred Ninety Thousand One Hundred Ninety and 38/100 Dollars ($190,190.38)
shall be due and payable without notice or demand, the first payment being due
on July 15, 2006, and the seven remaining payments being due on the first day of
each September, December, March and June during the period beginning on
September 1, 2006 and ending on March 1, 2008. For purposes of this Note, each
such date on which payment is due shall be referred to as a "Payment Due Date".
Payments shall be made by wire transfer of immediately available United States
federal funds sent to an account or accounts designated by the holder in
accordance with the instructions furnished to the Company for that purpose.
This Note constitutes the "Promissory Note" described in that certain
Stock Purchase Agreement dated April 13, 2006 (the "Stock Purchase Agreement"),
by and among the Company, Payee, and Network System Technologies, Inc., an
Illinois corporation, and is entitled to all of the benefits of the Stock
Purchase Agreement. Unless defined herein, capitalized terms used herein that
are defined in the Stock Purchase Agreement have the meaning given to such terms
in the Stock Purchase Agreement.
The Company agrees to pay all costs, charges and expenses incurred by the Payee
and its assigns (including, without limitation, costs of collection, court
costs, and reasonable attorneys' fees and disbursements) in connection with the
successful enforcement of the Payee's rights under this Note (all such costs,
fees and expenses being herein referred to as "Costs").
The Company hereby expressly waives presentment, demand, and protest,
notice of demand, dishonor and nonpayment of this Note, and all other notices or
demands of any kind in connection with the delivery, acceptance, performance,
default or enforcement hereof. The rights and remedies of the holder as provided
herein shall be cumulative and concurrent and in addition to any other rights
the Payee may have at law, in equity or otherwise, and may be pursued
singularly, successively or together at the sole discretion of the holder and
may be exercised as often as occasion therefor shall occur. The Company agrees
that any delay or failure on the part of the Payee in exercising any rights or
remedies hereunder will not operate as a waiver of such rights, and further
agrees that any payments and prepayments received hereunder will be applied
first to Costs, then to interest and the balance to principal. The Payee 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 the party or parties waiving such rights or remedies. All payments
under this Note shall be made without counterclaim, offset or defense of any
kind.
This Note will be registered on the books of the Company or its agent as
to principal and interest. This Note applies to, inures to the benefit of, and
binds the successors and assigns of the parties hereto; provided however that
the Company shall not assign this Note without the prior written consent of the
Payee, which consent may be withheld in Payee's sole and absolute discretion.
Any transfer of this Note by Payee will be effected only by surrender of this
Note to the Company and reissuance of a new note to the transferee. The Payee
and any subsequent holder of this Note receives this Note subject to the
foregoing terms and conditions, and agrees to comply with the foregoing terms
and conditions for the benefit of the Company and any other Payees.
Any notice required or permitted under this Note shall be in writing and
shall be deemed to have been given on the date of delivery, if personally
delivered to the party to whom notice is to be given, or on the third business
day after mailing, if mailed to the party to whom notice is to be given, by
certified mail, return receipt requested, postage prepaid, and addressed as
follows:
If to the Company, at
Incentra Solutions, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
If to Payee, at
Xxxxxx X. Xxxxxxxx
0000-00 Xxxxxx Xxxx
Xxxxxxx, Xx 00000
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or, in each case, to the most recent address, specified by written
notice, given to the sender pursuant to this paragraph.
If any one or more of the following events ("Events of Default") shall
occur, to wit:
(a) Failure by the Company to make prompt payment, when due, of
any payment due hereunder, and such failure continues for five (5) days
after Payee gives written notice thereof to Company;
(b) The failure by Company to observe, keep or comply with any
provision or requirement contained in the Stock Purchase Agreement; or
(c) Failure by the Company to promptly perform or observe any
other covenant, promise or agreement contained herein and such failure
continues for five (5) days after Payee gives written notice thereof to
Company.
then, at any time thereafter, at the sole option of Payee, without further
notice to Company, the unpaid principal balance, accrued interest and the
prepayment premium or penalty, if any, shall become immediately due and payable
without presentment, notice of dishonor, demand, notice or protest of any kind,
all of which are expressly waived by the Company. All sums coming due and
payable under this paragraph shall bear interest after acceleration hereof at
the rate of ten (10%) percent per annum or the maximum rate permitted by law,
whichever is less (the "Default Rate"). In the event that any installment is not
received by Payee within ten (10) days of its due date, Company shall pay a late
charge of five (5%) percent ("Late Charge") of said installment, which Late
Charge shall continue until all past due installments and accrued Late Charges
are paid in full, or upon the occurrence of an Event of Default, whichever
occurs first.
This Note shall be governed by and construed in accordance with the laws
of the State of Illinois.
If any provision in this Note is held by a court of competent
jurisdiction to be in violation of any applicable local, state or federal
ordinance, statute, law, administrative or judicial decision, or public policy,
and if such court should declare such provision of this Note to be illegal or
unenforceable as written, then such provision shall be given full force and
effect to the fullest possible extent that (1) it is legal, valid and
enforceable, (2) the remainder of this Note shall be construed as if such
illegal or unenforceable provision was not contained therein, and (3) the
rights, obligations and interest of the Company and Payee under the remainder of
this Note shall continue in full force and effect.
COMPANY HEREBY (A) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO
ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS NOTE; (B)
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN
OR NEAR CHICAGO, ILLINOIS OR BOULDER, COLORADO, OVER ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY
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MATTER ARISING FROM OR RELATED TO THIS NOTE; (C) WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON COMPANY, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY MESSENGER, CERTIFIED MAIL OR REGISTERED MAIL DIRECTED TO SUCH COMPANY AT
THE ADDRESS SET FORTH ABOVE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT OR THE SECOND (2ND) BUSINESS DAY AFTER THE
SAME SHALL HAVE BEEN POSTED TO SUCH COMPANY; (D) IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT COMPANY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING; AND (E) AGREES NOT TO
INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST PAYEE OR ANY OF PAYEE'S
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER
ARISING OUT OF OR RELATING TO THIS NOTE IN ANY COURT OTHER THAN ONES INDICATED
ABOVE. NOTHING IN THIS PARAGRAPH SHALL AFFECT OR IMPAIR PAYEE'S RIGHT TO SERVE
LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR PAYEE'S RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST COMPANY, OR ANY COMPANY'S PROPERTY IN THE COURTS OF
ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, the Company has executed this Note under seal as of
the date first written above.
INCENTRA SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx III
Chief Executive Officer
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