Exhibit 10.1
------------
PROMISSORY NOTE
---------------
$500,000 January 25, 2006
FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇▇▇▇▇ Filters, Inc., a Delaware
corporation ("Maker") promises to pay to the order of ▇▇▇▇▇▇▇ Group, Ltd.
("Lender"), at its principal office, or at such other place as may be designated
in writing by the holders of this Promissory Note ("Note"), the principal sum of
FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00) (the "Principal Sum").
The unpaid Principal Sum shall bear interest at the rate of 8% per annum, and
shall be due in full, along with the additional amount set forth in the fifth
paragraph of this Note, on December 31, 2007.
All payments to be made under this Note shall be payable in lawful
money of the United States of America which shall be legal tender for public and
private debts at the time of payment.
In the event that an action is instituted to collect this Note, or any
portion thereof, Maker promises to pay all costs of collection, including but
not limited to reasonable attorneys' fees, court costs, and such other sums as
the court may establish.
In the event of a default under this Note when due, then the holder of
this Note, at its election, may declare the entire unpaid Principal Sum and all
accrued but unpaid interest thereon immediately due and payable.
Lender shall receive as additional interest on this Note an amount
equal to the lesser of (a) $25,000 or (b) 3% of the net profit after taxes of
Maker as of September 30, 2007, such net profits to be calculated on a
consolidated basis and before adjustments for the cumulative effects of
accounting changes or extraordinary charges. Such additional interest amount
shall be paid simultaneously with the payment of the Principal Sum and interest
set forth in the first paragraph of this Note on December 31, 2007. For purposes
of this Note, the Maker shall calculate the amount payable under clause (b)
above in accordance with GAAP as modified by financial accounting requirements
of the Securities and Exchange Commission. If a portion of the Principal Sum or
interest set forth in paragraph one of this Note is paid prior to December 31,
2007, the calculation of the additional interest set forth in this paragraph, to
be paid on December 31, 2007, shall be adjusted pro-rata.
Every provision hereof is intended to be several. If any provision of
this Note is determined, by a court of competent jurisdiction to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
not affect the other provisions hereof, which shall remain binding and
enforceable.
This Note is made in the State of North Carolina and it is mutually
agreed that North Carolina law shall apply to the interpretation of the terms
and conditions of this Note.
All agreements between the holder of this Note and Maker are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of deferment or acceleration of the maturity of this Note or otherwise,
shall the rate of interest hereunder exceed the maximum permissible under
applicable law with respect to the holder. If, from any circumstances
whatsoever, the rate of interest resulting from the payment and/or accrual of
any amount of interest hereunder, at any time that payment of interest is due
and/or at any time that interest is accrued, shall exceed the limits prescribed
by such applicable law, then the payment and/or accrual of such interest shall
be reduced to that resulting from the maximum rate of interest permissible under
such applicable law. This provision shall never be superseded or waived.
IN WITNESS WHEREOF, this instrument is executed as of the date first
hereinabove set forth.
▇▇▇▇▇▇▇▇▇ FILTERS, INC.
By:/s/ Learned ▇▇▇▇▇▇▇▇ Hand
----------------------------
Name: Learned ▇▇▇▇▇▇▇▇ Hand
Its: Chief Executive Officer
