Document:

Exhibit 10.5

 

AGREEMENT

 

This Agreement (the “Agreement”) is made and entered into at Minneapolis,
Minnesota, this 19th day of October 2005 by and between Westurn
Cedar Supply, Inc., a Minnesota corporation (“Westurn”), and National
Storm Management, Inc., a Nevada corporation, and its wholly-owned
subsidiary. KSMS – Minnesota, Inc., a Minnesota corporation (d/b/a/WRS or
other assumed name) (collectively “KSMS”).

 

RECITALS:

 

WHEREAS, Westurn has been engaged in the
business of roofing within the State of Minnesota (the “Territory”) for a
number of years, and has developed an excellent reputation within the
construction and roofing industry, and

 

WHEREAS, KSMS has represented to Westurn that
it has substantial experience in the business of residential and commercial
roofing, is able to perform residential and commercial roofing work in a
first class manner, and that KSMS intends to perform residential and
commercial roofing work exclusively as it relates to hail damage jobs that will
be covered by insurance claims so that it will not be in competition with Westurn;
and

 

WHEREAS, Westurn desires to contract with
KSMS so as to leverage KSMS’s experience in the performance of services as
contemplated under this Agreement, but subject to all of the covenants, undertakings,
limitations and restrictions provided in this Agreement.

 

NOW, THEREFORE, in
consideration of the covenants and undertakings herein provided, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
reciprocally acknowledged, IT IS AGREED AS
FOLLOWS:

 

1.             Preamble.
 The foregoing preamble shall form a
part of this Agreement.

 

2.             Work
to be Performed.  Subject to all of
the covenants, undertakings, limitations and restrictions provided in this
Agreement during the Term of this Agreement, KSMS shall:

 

a.               Under
the trade name of Westurn Roofing & Siding, but under KSMS’s
contractor license, solicit services (phone solicitations and door to door) and
enter into contracts (“Contracts”) in connection with the repair of (i) residential
and commercial roofs, (ii) gutters, (iii) siding, (iv) related
damage related to or caused by hail and storms (items (i), (ii), (iii), and
(iv), collectively referred to as the “Business”) within the Territory. Westurn
hereby licenses the trade name Westurn Roofing & Siding on an
exclusive basis in the Territory for the Term to KSMS for the purpose of the
Business. KSMS will deliver to Westurn, a copy of each contract

 

 

within three (3) business days of
execution. KSMS will use its own telephone number which will be registered to
its office to solicit prospective customers. This telephone number will remain
as property of Westurn upon termination or expiration of this Agreement. KSMS
will stop using marketing materials with the Westurn name immediately upon
expiration or termination of this Agreement.

 

b.               Obtain
all necessary permits and provide, at its own expense, all the necessary labor
and materials to perform the Business related Contracts. KSMS will
establish its own line of credit with applicable local suppliers. Westurn will
use commercially reasonable efforts to assist in facilitating discussions
between KSMS and applicable local suppliers. KSMS will use Westurn as a
supplier to the extent of Westurn’s ability to provide products to KSMS on a
timely and competitive basis.

 

3.             Fees.
 In accordance with the procedure
described in Section 4 of this Agreement, KSMS agrees to pay Westurn a fee
(the “Fee”) in consideration for KSMS’s ability to use Westurn’s name
hereunder, which Fee shall be determined as follows:

 

a.               The
fee shall be a percentage of the Gross Sales price of each Contract obtained
and performed by KSMS during the term of this Agreement, determined as follows:

 

i.              six
point five percent (6.5%) until total fees paid to Westurn equal $406,250.

ii.             five
point five percent (5.5%) after total fees paid to Westurn exceed $406,250.

iii.            four
point five percent (4.5%) after total fees paid to Westurn exceed $750,000.

iv.            three
point five percent (3.5%) after total fees paid to Westurn exceed $1,031.250.

 

b.               The
term Gross Sales price as used herein, shall mean any and all amounts to be
paid under all Business related Contracts, including, but not limited to,
materials, labor overhead and profit, warranty premiums, and any other monies
directly or indirectly related to the contracts solicited by and work performed
by KSMS.

 

4.             KSMS
will establish its own independent Bank account and give copies of deposit
slips to Westurn. All deposits for KSMS will be made to KSMS’s Bank less the
applicable percentage set forth in section 3a above made to Westurn’s bank
one business day after KSMS’s deposit.

 

5.             Audit.
KSMS shall keep accurate and complete records of the Contracts, and Westurn
shall have the right to review all of KSMS’s books and records related to the
Business once in every calendar quarter. KSMS shall provide Westurn with access
to its books and

 

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records upon reasonable notice as required to
complete the review described in the immediately preceding sentence. This
review shall be performed during KSMS’s regular business hours.

 

Provided, further, Westurn shall have the
right to hire an independent accounting firm to audit KSMS’s records once every
calendar year, and if it is determined in connection with such audit that the
amount of Gross Sales have been understated, and that such understatement of
Gross Sales is in excess of five (5) percent for the period being audited,
KSMS shall reimburse Westurn for the cost of such audit. In any event, KSMS
shall promptly pay to Westurn the amount of the Fee determined to be due from
such review of audit, plus interest at twelve (12%) percent per annum from the
date any payments are due.

 

6.             Westurn
Representations and Warranties.  As
an inducement for KSMS to enter into this Agreement, Westurn represents and
warrants to KSMS as follows:

 

a.               Westurn
will provide KSMS with all necessary marketing material. Subject to the
restrictions contained in Section 7f, Westurn will not contest, sue, seek
a judgment or injunction against KSMS for KSMS’s use of Westurn name in sales
literature, contracts, and letterhead, as well as any marketing material that may support
the Business. KSMS agrees to pay for any copies and/or creation of new or
existing marketing literature.

 

b.               Westurn
holds all licenses of governmental authorities and agencies necessary to
conduct its business operations of residential roofing in the Territory and
will continue to hold all such permits, licenses and approvals during the Term
of this Agreement.

 

c.               Westurn
may inspect the quality of each job completed by KSMS to ensure the work
satisfies city codes. The inspection shall take place within seven (7) days
of a newly installed roof. KSMS will be responsible, at its own expense, for
providing people (labor) and materials for any problems and repairs relating to
its performance noted by Westurn.

 

d.               During
the term of the Agreement, KSMS will honor all the labor warranties described
in Section 7c. Upon termination of this Agreement, Westurn will honor the
KSMS labor warranties described in Section 7c, which labor warranties
begin once the job is completed. KSMS agrees to reimburse Westurn for any labor
warranty work performed on a time and material basis at customary rates then in
effect at the time such work is performed. Payment shall be due within 30 days
of receipt of an invoice from Westurn for warranty work. All such payments
shall be made out of a joint Westurn and KSMS account to be established on
expiration or termination of this Agreement which shall be funded by a deposit
from KSMS equal to $50.00 per Business related Contract. To the extent that

 

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funds in the account are not sufficient to
reimburse Westurn, KSMS shall make payment to Westurn. KSMS shall be entitled
to withdraw one-third of the then account balance eighteen (18) months after
expiration or termination of this Agreement, and an additional one-third of the
then account balance thirty-six (36) months after expiration or termination of
this Agreement. Any funds remaining in the account five (5) years after
expiration or termination of this Agreement shall be paid to KSMS, subject
however, to offset for any other obligations of KSMS under this Agreement that
have not been fully performed or satisfied.

 

7.              KSMS
Representations and Warranties.  As
an inducement for Westurn to enter into this Agreement, KSMS represent and
warrant to Westurn as follows:

 

a.               KSMS
holds all licenses of governmental authorities and agencies necessary to
conduct its business operations in the Territory and will continue to hold all
such permits, licenses and approvals during the Term of this Agreement.

 

b.               KSMS
will only engage in the repair and replacement of commercial and residential
roofs, gutters, siding and related damage as it relates to hail and storm
damage within the Territory, and it will not enter into any agreement with any
other third party to perform commercial and residential roofing, gutter or
siding repair in the Territory during the term of this Agreement, unless the
parties otherwise agree in writing; provided, however, KSMS will be entitled to
engage in the repair and replacement of commercial roofs and related damage
that is not related to hail and storm damage with the Territory during the
Term.

 

c.               KSMS,
at its own expense, will obtain all necessary permits and provide all the labor
and materials, with the materials being of the same or better quality of that
used by Westurn, for each Contract and it will be responsible for all administration
expenses connected therewith, including but not limited to billing and
collection expenses. KSMS will perform all labor in a manner which meets
or exceeds all applicable code requirements and Westurn’s standards. KSMS will
provide Westurn with a copy of permits obtained by KSMS on a weekly basis.

 

d.               KSMS
will offer a maximum of: (i) five (5) year labor warranty on each
roofing job; (ii) a one (1) year labor warranty on all gutter jobs;
and (iii) a two (2) year labor warranty on each siding job.

 

e.               KSMS
has substantial experience in installing and repairing residential and
commercial roofs, gutters and siding, and will hire experienced and competent
contractors to perform the roofing work, provided, however, that it will
not hire any contractors who have been hired by Westurn in the previous twelve
months without first receiving permission from

 

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Westurn KSMS will handle all customer
relations, i.e., complaints, repairs, problems resulting from its activities
under this Agreement.

 

f.                KSMS
has paid-in-capital, and funds available for working capital, sufficient to
conduct its contemplated business operations. KSMS will pay all of its vendors
and suppliers when due, and will not be in default of any of its credit
obligations.

 

g.               During
the Term of this Agreement, other than phone solicitations and door to door
solicitations in the Territory, KSMS will not market, promote, or otherwise
advertise its services, unless it receives Westurn’s prior written consent. KSMS
will conduct all phone and door to doors solicitations in a professional and
business like manner and will not harass prospective customers. All efforts to
collect monies owed under Contracts will also be done in a professional and
business like manner.

 

h.               KSMS
agrees to provide in its employees appropriate minimum wages and benefits, and
obtain and maintain appropriate coverage for them under all benefit and other
programs as may be required by law or contract with its employees or their
collective bargaining representatives. KSMS also agrees and understands that it
must maintain all appropriate records and information concerning its employees’
receipt of such wages and benefits.

 

i.                KSMS
agrees that it will provide its employees with coverage under Minnesota Workers’
Compensation and Unemployment Compensation Program, and that it will maintain
all appropriate records and information concerning its payment of premiums and
its employees’ coverage under these programs. KSMS will provide Westurn with
its certificate of coverage under these programs. KSMS will provide Westurn
with its certificate of coverage upon execution of this Agreement. KSMS will
ensure that any of its subcontractors also provide its employees with coverage
under the Minnesota Workers’ Compensation and Unemployment Compensation Program.
KSMS also will provide Westurn with certificates of coverage of its
subcontractors.

 

j.                KSMS
agrees to pay all local, state and federal taxes resulting from its activities
contemplated under this Agreement.

 

k.               KSMS
will not take any action that jeopardizes or in any way may harm the
reputation of the Westurn roofing name.

 

l.                KSMS
acknowledges and agree that it has responsibility for the compliance with all
the requirements of the Occupational Safety and Health Act of 1970 as amended
and the regulations thereunder.

 

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m.              KSMS
acknowledges and agree that it has responsibility for the compliance with all
the requirements of the Occupational Safety and Health Act of 1970 as amended
and the regulations thereunder.

 

n.               KSMS
agrees to have all out of state salesmen get a Minnesota license plate to the
best of their ability.

 

8.              Insurance.
 KSMS agrees to provide and maintain
general liability insurance coverage, in an amount not less than $2,000,000.00
combined single limit per occurrence and a $2,000,000.00 general aggregate,
providing coverage for completed operations, products liability and contractual
liability. KSMS shall also provide automobile liability coverage with limits of
not less than $1,000,000.00 for each accident. KSMS’s insurance carriers must
be rated at least an A-minus by A. M. Best. KSMS shall require any
subcontractors used by it to perform work on the Business related
Contracts to have similar insurance coverage. KSMS shall provide Westurn with a
Certificate of Insurance naming Westurn as an additional named insured on KSMS’s
policy and shall provide that Westurn shall receive at least thirty (30) days
written notice prior to cancellation, non-renewal or alteration in the terms of
the policies.

 

9.              Non-Competition.  KSMS acknowledges that Westurn’s willingness
to contract with KSMS as provided herein is based upon the fact that this would
be a beneficial relationship in any way. KSMS agrees to be engaged exclusively
in the services described in the definition of Business in Section 2 as it
relates to hail and storm damage and insurance claims; provided, however, KSMS
retains the right to engage in commercial roofing repair and replacement not
related to hail and storm damage and regardless of insurance claims. KSMS will
not compete with Westurn in the non-hail or storm damage residential roofing,
gutter and siding business in the Territory during the Term of this Agreement. KSMS
agrees that these non-competition restrictions shall apply to National Storm
Management, Inc., and any and all of its subsidiaries or related
organizations, and all of their collective officers, directors and key
employees. Neither Westurn nor KSMS will solicit, hire, or contract employees
or subcontractors of the other party during the term of this Agreement.

 

10.            Confidential
Information.  All information,
including but not limited to customer lists and trade secrets concerning Westurn
and its business disclosed to KSMS hereunder, whether such information is
communicated orally or in writing, shall be considered confidential information
and retained in confidence by KSMS and shall not be published or disclosed to
any person, firm, corporation, or entity except as expressly authorized by Westurn.
All tangible confidential information shall be returned to the Westurn
immediately upon termination of this Agreement. All contracts and job files
shall be delivered to Westurn immediately upon termination of this Agreement,
subject however to the right of KSMS to have access to such records for
business purposes during normal business hours. Westurn agrees that KSMS can
issue press releases regarding the Agreement.

 

11.            Relationship
of the Parties.  The parties are independent
contractors and under no circumstances are either to be deemed a legal
representative, express or implied agent, employee, or officer of the other
party.

 

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12.            Indemnity.
 KSMS shall defend, indemnify, and hold
harmless Westurn and its subsidiaries, affiliates, successors, assigns, and
agents from and against all claims, demands, actions, lawsuits, judgment,
decrees, losses, damages, liabilities, fines, costs and expenses, including
claim investigation expenses, reasonable attorney fees and amounts paid in
defense or settlement (“Damages”), which may arise on account of KSMS’s
work under the Business related Contracts or KSMS’s failure to perform any
of its obligations under this Agreement and the relationship contemplated by
this Agreement. Westurn shall defend, indemnify and hold harmless KSMS and its
subsidiaries, affiliates, successors and assigns for any Damages relating to a
breach of this Agreement by Westurn.

 

13.            Agreement
Term and Termination.

 

a.               Subject
to the termination provisions set forth below, this Agreement shall become
effective upon execution, and shall continue in effect for an initial term of
one (1) year (the “Initial Term”). After the Initial Term, this Agreement may be
extended by the mutual agreement of the parties. Either party shall have the
right to terminate this Agreement at anytime upon ninety (90) days prior
written notice. If the Agreement expires after the Initial Term or is
terminated by either party as provided in this section 13a, KSMS will
complete all Contracts existing as of the day of termination or expiration,
subject to the terms and conditions provided herein.

 

b.               Notwithstanding
the provisions contained in Section 13a above, Westurn shall have the
right to terminate this Agreement sooner than with ninety (90) days notice if
in its sole discretion, it determines that KSMS’s actions have caused damage or
harm to the Westurn name or reputation. In the event Westurn name has been
damaged or harmed, Westurn will notify KSMS in writing of this fact, and KSMS
will then have three (3) days upon receipt to provide Westurn with its
plan of action (“Plan”) to remedy the situation. If after thirty (30) days
following Westurn’s receipt of such Plan, Westurn feels the situation cannot be
remedied, then the Agreement may be terminated immediately by Westurn. If
the Agreement is terminated as provided in this 13b, KSMS retains the right to
complete any and all unfinished Contracts as of the date of termination and to
collect any and all monies thereon subject to the terms and conditions provided
herein.

 

c.               If
this Agreement is terminated as provided in 13b, KSMS agrees that the fee
provided in 2a shall be five and one-half percent (5.5%) of the Gross Sales
Price of such Contract obtained and performed by KSMS during the term of this
Agreement, instead of the percentages stated in 2a, and that the balance of any
Fees not yet paid shall be due within ninety (90) days of the date of
termination. In addition, Westurn shall be entitled to be paid by KSMS for any
and all actual damages, excluding incidental and

 

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consequential damages, occasioned by KSMS’s
actions, failure to act, or breach of this Agreement.

 

14.            Non-Assignability.
 This agreement is personal to KSMS, and
is non-assignable or transferable. The duties of KSMS hereunder are not
delegable to any other person, firm or corporation, directly or indirectly,
without the prior written consent of Westurn; provided, however, that KSMS
shall be entitled to the subcontractors hereunder. This Agreement is binding on
the successors and permitted assigns of the parties.

 

15.            Entire
Agreement.  The parties reciprocally
agree that this Agreement represents whole and entire the understanding of the
parties, and that no modification shall be effective unless reduced to writing
and signed by the parties herein.

 

16.            Survival.
 The provisions contained in this
Agreement which by their nature would go beyond termination or expiration,
including but not limited to (i) Fee payments on Contracts signed before
termination or expiration but not completed until after termination or
expiration (ii) indemnity obligations, (iii) insurance obligations,
and (iv) non-compete obligations, shall survive termination or expiration
of this Agreement.

 

17.            Construction.  This Agreement shall be construed and
governed in accordance with the laws of the State of Minnesota.

 

18.            Arbitration.
 The parties agree that any dispute
arising hereunder shall be submitted to an independent arbitrator located in
Minneapolis, Minnesota pursuant to the rules of the American Arbitration
Association.

 

IN WITNESS WHEREOF, the parties above have
duly executed this Agreement on the date first above written.

 

	
  Westurn Cedar Supply, Inc.

  	
  National Storm Management, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
     /s/
  Thomas G. Balkins

  	
   

  	
  By:

  	
  /s/ Brian Southard

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KSMS-Minnesota, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian Southard

  	
   

  
						

 

8Exhibit 10.6

 

PROMISSORY NOTE

 

	
  $100.000.00

  	
   

  	
  GLEN ELLYN, ILLINOIS

  	
   

  	
  October 12, 2005

  

 

FOR VALUE
RECEIVED, the undersigned, PINNACLE ROOFING, INC, a FLORIDA corporation, whose
address for purposes of notice is 999 N MAJN ST, STE 202, GLEN ELLYN, ILLINOIS
60137, TERRY DEER (whether one or more, “Borrower”) hereby promises, jointly
and severally, to pay to the order of GULFSIDE SUPPLY, INC. d/b/a GULFEAGLE
SUPPLY, a Delaware corporation (“Lender”), without grace at its office at 1451
Channelside Drive, Tampa, Florida 33605, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, the
principal amount of ONE HUNDRED THOUSAND and 00/100 Dollars ($100,000.00)

 

This Note is
delivered by Borrower to further evidence amounts owing and past due to Lender
related to the purchase of certain roofing materials and supplies for use in
Borrower’s business. Borrower has requested that Lender make certain
accommodations and temporarily forbear from the exercise of its available rights
and remedies in collecting such amounts. Lender has agreed to make certain
accommodations and to grant such forbearance as and only to the extent set
forth herein, and without waiving any of Lender’s rights and remedies.

 

Payment of
principal and interest shall be in accordance with the following provisions:

 

1.             Definitions.

 

(a)           “Applicable Rate”
shall mean the fixed per annum rate of SIX percent (6%).

 

(b)           “Business Day”
shall mean a day (other than Saturday or Sunday) when Lender is open for conducting
all of its customary commercial banking activities.

 

(c)           “Default Rate”
shall mean the lesser of the Maximum Rate and eighteen percent (18%) per annum.

 

(d)           “Holder” shall
mean Lender and any subsequent holder of this Note.

 

(e)           “Loan” shall
mean the loan from Lender to Borrower, in the amount of this Note.

 

(f)            “Maturity Date”
shall mean April 25, 2006.

 

(g)           “Maximum
Rate” shall mean, with respect to Holder, the maximum non- usurious
interest rate, if any, that at any time, or from time to time, may be
contracted for, taken, reserved, charged, or received on the indebtedness
evidenced by this Note, under the laws which are presently in effect of the
United States and the State of FLORIDA applicable to such Holder and to such
indebtedness or, to the extent permitted by law, 

 

 

under such applicable laws of the United
States and the State of FLORIDA which may hereafter be in effect and which
allow a higher maximum non-usurious interest rate than applicable laws now
allow.

 

(h)           “Note” shall
mean this Promissory Note.

 

(i)            “Security Documents”
shall mean this Note, and any and all other documents or instruments otherwise
executed by Borrower or third parties in connection with the Loan.

 

2.             Payments.
Borrower promises to pay equal installments of principal and interest in the
amount of $16,959.55, on the twenty-fifth (25th) day of each month, commencing
on November 25, 2005. The final payment will be in the amount of $16,959.52. All
outstanding principal, including the aggregate unpaid principal amount of all
future advances and readvances, if any, and accrued and unpaid interest on this
Note and all other amounts due with respect to the Note under the Security
Documents shall be due and payable on the Maturity Date. Principal owing
hereunder from time to time shall accrue interest at the lesser of the
Applicable Rate or the Maximum Rate.

 

3.             Other
Payment Terms.

 

(a)           Should
any payment become due and payable on any day other than a Business Day for
Lender, the date of such payment shall be extended to the next succeeding
Business Day, and, in the case of a payment of principal or past due interest
or any installment of either thereof, interest shall accrue and be payable
thereon for the period of such extension at the applicable interest rate or
rates specified herein. Each payment by Borrower on account of the principal of
or interest on this Note or of any fee or other amount payable to Lender shall
be made not later than 11:00 a.m. on the applicable due date (or if such day is
not a Business Day, the next succeeding Business Day). Any payment made after
11:00 a.m. shall be credited on the next succeeding Business Day. All payments
shall be made to Lender at Lender’s office, in U.S. Dollars, in immediately
available funds and shall be made without any setoff, counterclaim or deduction
whatsoever.

 

(b)           Except as otherwise
provided in this Note or the other Security Documents, interest shall accrue on
the principal balance from day to day outstanding hereunder at a rate equal to
the lesser of the Applicable Rate or the Maximum Rate. All payments of
principal and interest that are past due shall, at the option of Lender, bear
interest at a per annum interest rate equal to the Default Rate. Borrower
agrees to pay interest on all amounts due under the Security Documents which
Borrower fails or refuses to pay, following the applicable notice and cure
period, if any, at the Default Rate from the date due until paid.

 

(c)           Except for purposes of
computing the Maximum Rate, interest shall be calculated on the basis of a 360-day
year applied to the actual number of days upon which principal is outstanding
by multiplying the principal amount outstanding hereunder 

 

 

by the applicable interest rate, multiplying
the product thereof by the actual number of days elapsed, and dividing the
product so obtained by three hundred sixty (360).

 

(d)           In lieu of the interest
on past due installments provided for in this Note, Lender may collect a late
charge not to exceed five cents ($.05) for each dollar ($1.00) of each payment
of interest, principal and, if applicable, any other payment due under any of
the Security Documents which is more than ten (10) days in arrears, to cover
the extra expense involved in handling delinquent accounts; provided however,
that should such late charge constitute interest under any applicable law, such
late charge shall not, together with other interest to be paid, charged,
contracted for, received, or reserved against, or taken on the indebtedness
evidenced by this Note, or indebtedness arising under any of the Security
Documents exceed the Maximum Rate.

 

(e)           Borrower shall have the
right, from time to time, to prepay the unpaid principal, in whole or in part,
without premium or penalty, upon the payment of accrued interest on the amount
prepaid to and including the date of payment.

 

4.             Security
Documents. The indebtedness evidenced hereby is secured by the Security
Documents. This Note is included in the indebtedness referred to in the
Security Documents and is entitled to the benefits of those documents, but
neither this reference to those documents nor any provisions thereof shall
affect or impair the absolute and unconditional obligation of the Borrower to
pay the principal of and interest on this Note when due.

 

5.             Events
of Default. The happening of any one or more of the following events shall
constitute an Event of Default:

 

(a)           Borrower’s
failure to pay principal or interest due under this Note as and when due and
payable or the failure of Borrower to pay any other liability to Holder when
due and payable; or

 

(b)           The
occurrence of any event of default specified in any of the Security Documents
or in any other document, agreement or instrument now or hereafter executed in
connection with or securing this Note or any other document, agreement or
instrument now or hereafter executed, to which the Lender and Borrower are
parties.

 

Upon the happening of an Event of Default or
at any time thereafter during the continuance of any such event, the Holder
may, with notice to the Borrower, declare this Note to be forthwith due and
payable, both as to principal and interest, without presentment, demand,
protest, or other notice of any kinds, all of which are hereby expressly
waived, anything contained herein or in any of the Security Documents or in any
other instrument executed in connection with or securing this Note to the
contrary notwithstanding. Reference is made to the Security Documents for a
statement of the terms and conditions under which the credit facility
represented by this Note is being made available to Borrower and of additional
terms and conditions under which this Note may be accelerated.

 

 

6.             Waivers.
Borrower and guarantor, accommodation party, surety, endorser or other person
or entity liable for the payment or collection of this Note expressly waive
demand and presentment for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, notice of intent to accelerate, notice of
acceleration, all other notices, bringing of suit and diligence in taking any
action to collect amounts called for hereunder or enforcing any security or
guaranty, and agree to any substitution, exchange or release of any security,
with or without consideration, now or hereafter given for this Note or the
release of any party primarily or secondarily liable hereon. Borrower and
guarantor, accommodation party, surety, endorser or any other person or entity
liable for the payment or collection of this Note further agrees that it will
not be necessary for the owner or Holder hereof, in order to enforce payment of
this Note, to first institute or exhaust its remedies against any maker or
other party liable hereon or to enforce its rights against any security or
guaranty for this Note, and hereby consents to the renewal and extension from
time to time of this Note, and any other indulgence with respect hereto without
notice of any such renewal, extension or indulgence, and without limit as to
the number of such renewals, extensions or indulgences or the period or periods
thereof.

 

7.             Attorneys’
Fees and Costs. Borrower agrees to pay reasonable attorneys’ fees and costs
incurred by the Holder in collecting or attempting to collect this Note,
whether by suit or otherwise.

 

8.             Limitations
on Interest.

 

(a)           It
is the intention of the Lender and the Borrower to conform strictly to any
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under any applicable law, then, in that event,
notwithstanding anything to the contrary in this Note, the Security Documents
or any other agreement entered into in connection with or as security for or
guaranteeing the Credit Agreement or this Note, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under applicable
law that is contracted for, taken, reserved, charged or received by the Lender
under this Note, the Security Documents or under any other agreement entered
into in connection with or as security for or guaranteeing the Credit Agreement
or this Note shall under no circumstances exceed the Maximum Rate, and any
excess shall be canceled automatically and, if theretofore paid, shall, at the
option of the Lender, be credited by the Lender on the principal amount of any
indebtedness owed to the Lender by the Borrower or refunded by the Lender to
the Borrower; and (ii) in the event that the maturity of this Note is
accelerated or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to the Lender may
never include more than the Maximum Rate, and excess interest, if any, provided
for in this Note, the Security Documents or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall, at the option of the Lender, be credited by the Lender
on the principal amount of any indebtedness owed to the Lender by the Borrower
or refunded by the Lender to the Borrower.

 

(b)           Notwithstanding
anything herein to the contrary, in no event will interest payable to the
Lender exceed the Maximum Rate (after taking into account all charges 

 

 

payable to the
Lender which constitute interest under such applicable law), but if any amount
referred to in this Note which would be payable to the Lender but for the
applicability of usury or other laws limiting the consideration payable to the
Lender is not paid to the Lender as a result of the applicability of such laws,
then interest on the outstanding principal balance of this Note payable to the
Lender shall, to the extent permitted by the law, accrue at the Maximum Rate
(after taking into account all charges payable to the Lender which constitute
interest under applicable law) until the total amount received by the Lender
equals the amount it would have received had no such laws been applicable.

 

9.             Applicable
Law: Venue. This Note shall be governed by, and construed in accordance
with, the laws of the State of FLORIDA, subject, however, to the effect of
applicable federal law. Jurisdiction and venue for any action brought to
enforce or interpret any term or condition set forth in this Note or the other
Security Documents, or which relates in any way to this Note or the other
Security Documents, shall be in the county and state of GULFEAGLE SUPPLY’S
choice, to the exclusion of all other jurisdictions and venues.

 

10.           Assigns.
As used herein, the terms “Borrower,” “Lender” and “Holder” shall be deemed to
include their respective successors, legal representatives and assigns, whether
by voluntary action of the parties or by operation of law.

 

 

IN WITNESS
WHEREOF, Borrower has caused this Note to be executed and delivered effective
the date above written.

 

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  PINNACLE
  ROOFING, INC.,

  
	
   

  	
  a FLORIDA
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Terry Kiefer

  
	
   

  	
  Name:

  	
  Terry Kiefer

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Terry Kiefer

  
	
   

  	
  Terry Kiefer, Individually

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