Exhibit 10.31
This Note has not been registered under the Securities Act of 1933, as amended
(the "1933 Act"), and the securities laws of any state. The Note has been
acquired for investment purposes only and not with a view to distribution or
resale, and may not be sold, assigned, made subject to a security interest,
pledged, hypothecated, transferred or otherwise disposed of unless and until
registered under the 1933 Act, or an opinion of counsel satisfactory to Eagle
Supply Group, Inc. is received that registration is not required under such 1933
Act or such state securities laws.
EAGLE SUPPLY GROUP, INC.
$100,000.00
PROMISSORY NOTE
Eagle Supply Group, Inc., a Delaware corporation (the "Corporation"),
for value received, hereby promises to pay to TDA Industries, Inc. or registered
assigns (the "Holder") upon the earlier of (a) August 9, 2000 or (b) the closing
date of an initial public offering of the Corporation's equity securities
pursuant to which the Company receives gross proceeds of not less than
$10,000,000.00 (the "Maturity Date"), at the principal offices of the
Corporation, the principal sum of One Hundred Thousand Dollars and no cents
($100,000.00) in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest on the outstanding principal sum hereof at the rate
of six (6%) percent per annum from the date hereof until the Corporation's
obligation with respect to the payment of such principal sum shall be discharged
as herein provided (the "Note"). Interest shall be due and payable on the
Maturity Date and shall accrue and be payable in like coin or currency to the
Holder hereof at the office of the Corporation. In the event that for any reason
whatsoever any interest or other consideration payable with respect to this Note
shall be deemed to be usurious by a court of competent jurisdiction under the
laws of the State of New York or the laws of any other state governing the
repayment hereof, then so much of such interest or other consideration as shall
be deemed to be usurious shall be held by the Holder as security for the
repayment of the principal amount hereof or shall otherwise be waived.
1. Transfers of Note to Comply with the 1933 Act
The Holder agrees that this Note may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (1) to a person who, in
the opinion of counsel to the Corporation, is a person to whom the Note may
legally be transferred without
registration and without delivery of a current prospectus under the 1933 Act and
any applicable state securities laws with respect thereto and then only against
receipt of an agreement of such person to comply with the provisions of this
Section 1 with respect to any resale or other disposition of the Note; or (2) to
any person who complies with the provisions of this Section 1 with respect to
any resale or other disposition of the Note; or (3) to any person upon delivery
of a prospectus then meeting the requirements of the 1933 Act relating to such
securities and the offering thereof for such sale or disposition, and thereafter
to all successive assignees.
2. Prepayment
The principal amount of this Note may be prepaid by the
Corporation, in whole or in part without premium or penalty, at any time. Upon
any prepayment of the entire principal amount of this Note, all accrued, but
unpaid, interest shall be paid to the Holder on the date fixed for prepayment by
the Corporation.
3. Covenants of Corporation
a. The Corporation covenants and agrees that, so long as this
Note shall be outstanding, it will:
(i) Do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence,
rights and franchises and comply with all laws applicable to
the Corporation as its counsel may advise; and
(ii) At all times keep true and correct books, records and
accounts.
4. Events of Default
a. This Note shall become due and payable immediately upon any
of the following events, herein called "Events of Default".
(i) Default in the payment of the principal or accrued
interest on this Note, when and as the same shall become due
and payable, whether by acceleration or otherwise;
(ii) Default in the due observance or performance of any
covenant, condition or agreement on the part of the
Corporation to be observed or performed pursuant to the terms
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hereof, if such default shall continue uncured for sixty days
after written notice specifying such default shall have been
given to the Corporation by the Holder;
(iii) The entry of a final judgment, arbitration award or
order against the Corporation in an amount exceeding $100,000
which judgment remains unsatisfied for ninety days after the
date of such entry;
(iv) Application for, or consent to, the appointment of a
receiver, trustee or liquidator for the Corporation or of its
property;
(v) Admission in writing of the Corporation's inability to
pay its debts as they mature;
(vi) General assignment by the Corporation for the benefit
of creditors;
(vii) Filing by the Corporation of a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization,
or an arrangement with creditors; or
(viii) The entry against the Corporation of a court order
approving a petition filed against it under the federal
bankruptcy laws, which order shall not have been vacated or
set aside or otherwise terminated within ninety days.
b. In case any one or more of the Events of Default specified
above shall happen and be continuing, the Holder may proceed to protect and
enforce his or her right by suit in the specific performance of any covenant or
agreement contained in this Note or in aid of the exercise of any power granted
in this Note or may proceed to enforce the payment of this Note or to enforce
any other legal or equitable rights as such Holder may have.
c. In the event that the Corporation shall default in the
payment of the principal and interest on the later of the Maturity Date or its
presentment for payment, the total principal amount of and interest due upon all
unpaid Notes shall automatically be due and payable.
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5. No Recourse
No recourse shall be had for the payment of the principal of or
interest upon this Note, or for any claim based thereon or otherwise, against
any incorporator, stockholder, officer, director or attorney, past present or
future of the Corporation whether by virtue of any constitution, statute, rule
or laws, enforcement of any assessment or penalty, or by reason of any matter
prior to the delivery of this Note or otherwise except for claims arising from a
theft or misappropriation of assets by any such person, or the declaration or
payment of dividends in violation of the Delaware General Corporation Law then
in effect, all such liability, by the acceptance hereof and as part of the
consideration of the issue hereof, being expressly waived.
6. Miscellaneous
a. This Note has been issued by the Corporation pursuant to
authorization of the Board of Directors of the Corporation.
b. The Corporation may consider and treat the person in whose
name this Note shall be registered as the absolute owner thereof for all
purposes whatsoever (whether or not this Note shall be overdue), and the
Corporation shall not be affected by any notice to the contrary. Subject to the
limitations herein stated, the registered owner of this Note shall have the
right to transfer this Note by assignment, and the transferee thereof shall,
upon his registration as owner of this Note, become vested with all the powers
and rights of the transferor. Registration of any new owner(s) shall take place
upon presentation of this Note to the Corporation at is principal offices,
together with a duly authenticated assignment. In case of transfer by operation
of law, the transferee agrees to notify the Corporation of such transfer and of
his address, and to submit appropriate evidence regarding the transfer so that
this Note may be registered in the name of the transferee. This Note is
transferable only on the books of the Corporation by the holder hereof, in
person or by attorney, on the surrender hereof, duly endorsed. Communications
sent to any registered owner shall be effective as against all holders or
transferees of the Note not registered at the time of sending the communication.
c. Payments of interest shall be made as specified above to
the registered owner of this Note. Payment of principal shall be made to the
registered owner of this Note upon presentation of this Note on or after
maturity. No interest shall be due on this Note for such period of time that may
elapse between the maturity of this Note and its presentation for payment.
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d. The Holder shall not by virtue hereof be entitled to any
rights of a stockholder in the Corporation, whether at law or in equity, and the
rights of the Holder are limited to those expressed in this Note.
e. Upon receipt by the Corporation of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and (in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Note, if mutilated,
the Corporation shall execute and deliver a new Note of like tenor and date. Any
such new Note executed and delivered shall constitute an additional contractual
obligation on the part of the Corporation, whether or not this Note so lost,
stolen, destroyed or mutilated shall be at any time enforceable by anyone.
f. This Note shall be construed and enforced in accordance
with the laws of the State of New York without regard to the conflicts of laws
principles thereof or the actual domiciles of the Corporation and the Holder.
The Corporation and the Holder hereby consent to the jurisdiction of the Courts
of the State of New York and the United States District Courts situated therein
in connection with any action concerning the provisions of this Note instituted
by the Holder against the Corporation.
IN WITNESS WHEREOF, Eagle Supply Group, Inc., has caused this Note to
be signed in its name by its Chief Executive Officer.
EAGLE SUPPLY GROUP, INC.
Date: August 20, 1998 By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx,
Chief Executive Officer
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