Exhibit 10.1


 


EBERLINE SERVICES, INC.


 


Promissory Note


 


	
  $[1,000,000]

  	
   

  	
  January 1, 2005

  



 


FOR VALUE RECEIVED, the undersigned, Eberline
Services, Inc., a Delaware corporation (“Maker”), hereby promises to pay
to Mr. Arvin Smith (the “Lender”) the principal sum of One Million U.S.
Dollars ($1,000,000), together with interest on the unpaid balance of such
principal amount from the date hereof until maturity at the rate of Bank Prime
Rate as quoted from time to time in the Wall Street Journal plus one percent (1.0%)
per annum.


 


The Maker shall repay the principal amount of
this Note in sixteen (16) equal quarterly installments commencing March 31,
2005 and on the last day of each calendar quarter thereafter until this Note is
paid in full. The Maker shall pay accrued interest on such principal amount at
the time of each quarterly payment of principal.  Notwithstanding the foregoing, the full
amount of principal and interest shall be paid no later than September 30,
2008 (the “Maturity Date”).


 


This Note
incorporates the following additional terms.


 


This Note evidences a loan made by the Lender
to Maker.  This Note is intended to
replace the Demand Promissory Note dated September 27, 2004 issued by
Eberline Services, Inc. to the Lender, which note is hereby cancelled.


 


Payments of principal of and interest on this
Note shall be made in lawful money of the United States of America to the
Lender at the Lender’s address set forth below, or at such other place as the
Lender shall have designated to the Maker in writing.  The Maker may prepay this Note without any
penalty or premium, in whole or from time to time in part, upon written notice
given at least ten (10) business days prior to the date fixed for such
prepayment.  All payments received by the
Lender with respect to this Note shall be applied first to the accrued interest
and then to principal.  All computations
of interest shall be calculated on the basis of actual number of days elapsed
over a year of 360 days.


 


This Note will be treated as Senior to any
other notes issued to Dr. Rick Chapman, Dr. Phillip Frost, Mr. Arvin
Smith and Mr. John Hatsopoulos (the “Other Lenders”).


 


The Lender, by his payment for and acceptance
of this Note, (1) represents and warrants that he is an “accredited
investor” as such term is defined in Rule 501 of Regulation D promulgated
under the Untied States Securities Act of 1933, as amended (the “Act”), and
that this Note is being purchased for his own account and not for distribution
within the meaning of the Act, and (2) agrees that he will not sell or
otherwise transfer or assign this Note unless it is registered under the Act or
unless an exemption from such registration is available.


 


The obligations of the Maker under this Note
shall automatically become due and payable immediately without notice or demand
in the event that (1) the Maker shall commence any case, proceeding or
other action under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with respect
to the Maker, or seeking to adjudicate the


 





















 


Maker a bankrupt or
insolvent or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to the Maker
or any of its debts, or seeking appointment of a receiver, trustee, custodian
or other similar official for the Maker for all or any substantial part of the
assets of the Maker, or Maker shall make a general assignment for the benefit
of its creditors, or part of the assets of the Maker, or there shall be
commenced against the Maker any case, proceeding or other action of a nature
referred to in this subparagraph (1), or there shall be commenced against the
Maker any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of the assets of the Maker which results in the entry of an
order for any such relief, or the Maker shall take any action in furtherance
of, or indicating its consent to, approval of, acquiescence in, any of the acts
set forth in this subparagraph (1), or the Maker shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; or (2) the Maker shall commence proceedings for the
dissolution or liquidation of the business of the Maker or shall suspend the
usual business of the Maker for a period of thirty (30) consecutive days.


 


Nothing in the Note shall affect or impair
the right, which is absolute and unconditional, of the Lender to receive
payment of or to institute suit to enforce this Note at and after the maturity
hereof (including maturity by declaration pursuant to this Note or otherwise)
or the obligation of the Maker, which is also absolute and unconditional, to
pay the principal of or interest on this Note to the Lender at the time and
place expressed herein.


 


In any case where the date of maturity on, or
principal of, this Note shall be a Sunday or a legal holiday in the
Commonwealth of Massachusetts or a day on which banking institutions doing
business in the Commonwealth of Massachusetts are authorized by law to close,
then payment of such interest may be made on the next succeeding business day
with the same force and effect as if made on the nominal date of maturity (and
no interest shall accrue for the period after such nominal date).


 


Except as herein otherwise expressly
provided, all notices, requests, demands, consents and other communications
required or permitted under this Note shall be in writing and shall be
considered to have been duly given when (1) delivered by hand, (2) sent
by facsimile (with receipt confirmed), provided that a copy is mailed (on the
same date) by certified or registered mail, return receipt requested, postage
prepaid, or (3) received by the addressee, if sent by Express Mail,
Federal Express or other reputable express delivery service (receipt
requested), or by first class certified or registered mail, return receipt
requested, postage prepaid, in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and telecopier
numbers as a person whose address is herein specified may from time to time
designate as to himself by notice similarly given to the other such designees
in accordance herewith). A notice of change of address shall not be deemed
given until received by the addressee. Notices shall be addressed:


 


	
  To the Lender at:

  	
   

  	
  Mr. Arvin Smith

  
	
   

  	
   

  	
  1300 Alexandra Court

  
	
   

  	
   

  	
  Colleyville, TX 76034

  
	
   

  	
   

  	
  Phone: (817) 788-1815

  
	
   

  	
   

  	
  Fax: (817) 788-1815

  
	
   

  	
   

  	
   

  
	
  To the Maker at:

  	
   

  	
  Eberline Services, Inc.

  
	
   

  	
   

  	
  7021 Pan American Freeway N.E.

  
	
   

  	
   

  	
  Albuquerque, NM
  87109-4338

  
	
   

  	
   

  	
  Attn: President

  
	
   

  	
   

  	
  Phone: (505) 262-2694

  
	
   

  	
   

  	
  Fax: (505) 262-2698

  



 


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In the case of the occurrence of an Event of
Default, the Maker shall be liable for all costs of enforcement and collection
of this Note incurred by the Lender or any other holder of this Note, including
but not limited to reasonable attorneys’ fees, disbursements and court costs.


 


The Maker hereby waives presentment, demand
for payment, notice of dishonor, protest and notice of protest, and any or all
other notices of demands in connection with the delivery, acceptance,
performance, default, endorsement or guarantee of this Note.  The liability of the Maker hereunder shall be
unconditional and shall not be in any manner affected by any indulgence
whatsoever granted or consented to by the holder hereof, including but not
limited to any extension of time, renewal, waiver or other modification.


 


This Note shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts (without
regard to the conflict of laws principles thereof).


 


	
   

  	
  EBERLINE SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Dr. Shelton Clark

  	
   

  
	
   

  	
  Name: Dr. Shelton
  Clark

  
	
   

  	
  Title: President,
  Eberline Services, Inc.

  



 


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