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Exhibit 99.1
PROMISSORY NOTE
PROMISSORY NOTE, dated as of October 1, 2007 (the
“ Note ”), issued by MPC-PRO, LLC, a Delaware limited liability
company and a wholly-owned subsidiary of the Guarantor (the
“ Borrower ”), to Gateway, Inc., a Delaware corporation (together
with its successors and assigns, the “ Lender ”), and guaranteed by
MPC Corporation, a Colorado corporation (the “
Guarantor ”).
WHEREAS, pursuant to that certain Asset Purchase
Agreement, dated as of September 4, 2007 (the “
Asset Purchase Agreement ”), by and among the Lender, the Borrower, the Guarantor
and Gateway Technologies, Inc., the Lender proposes to sell, and
the Borrower proposes to acquire, certain assets of the Lender (the
“ Assets ”) as provided therein; and
WHEREAS, as partial consideration for the
acquisition of the Assets by the Borrower and in connection with
the transactions contemplated by the Asset Purchase Agreement, the
Borrower has agreed to enter into this Note and to make payments to
the Lender in accordance with the terms set forth
herein.
NOW, THEREFORE, the parties hereto agree as
follows:
SECTION 1 . Note;
Obligation to Repay . (a) Upon the terms
and conditions set forth herein and in the Asset Purchase
Agreement, the Borrower hereby promises to pay to the Lender the
principal amount of One Million Two Hundred Ninety Three Thousand
Four Hundred Twenty Two dollars ($1,293,422.00), together with
interest on the outstanding principal amount of the Note as
provided in Section 2.
SECTION 2 .
Interest. (a) The outstanding principal
amount of the Note shall bear interest at a rate equal to eight
percent (8%) per annum (the “ Interest Rate ”), payable on
the last day of each Interest Period applicable thereto. Interest
shall accrue from and include the date of this Note but exclude the
date of final repayment of the Note. All computations of interest
shall be made on the basis of a 365-day year for the actual number
of days occurring in the period for which interest is payable.
“ Interest Period
” means the period beginning on the date
hereof (in the case of the first Interest Period) or on the last
day of the Interest Period then ending (in the case of each
subsequent Interest Period) and ending on the next succeeding
Payment Date.
(b) In the case of any overdue payments
of principal of and/or interest on the Note, the Borrower shall pay
interest, on demand by the Lender, at a rate equal to twelve
percent (12%) per annum.
SECTION 3 .
Repayment . (a) The Borrower shall repay
to the Lender the principal amount of the Note in three equal
bi-monthly installments beginning on the date that is two months
after the date of the Note and ending on the date that
is
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six months after the date of the Note (each, a
“ Payment Date
”). Each payment of principal on the Note
shall be accompanied by payment of interest accrued on the unpaid
principal amount of the Note for the Interest Period then ending.
All payments on the Note shall be made not later than 12:00 Noon
(New York City time) on the Payment Date when due in U.S. dollars
in immediately available funds to the Lender at the account of the
Lender specified on the signature pages hereof or such other
account as the Lender may designate in writing from time to
time.
(b) The Borrower may prepay the Note in whole or in part from time
to time on not less than two Business Days’ prior written
notice to the Lender in installments of not less than
$10,000; provided , that any prepayment in an amount less than 100% of the
outstanding principal and accrued interest on the Note shall be
allocated first to accrued interest and thereafter to principal.
The Note is not revolving in nature and any portion of the Note
prepaid under this Section 3(b) may not be reborrowed.
SECTION 4 . Ranking;
Subordination . The Note is subordinate
to MPC’s obligations under its Account Purchase Agreement
with Wells Fargo Bank, National Association acting through its
Wells Fargo Business Credit operating division (a copy of which has
been provided to Lender).
SECTION 5 .
Security . The Note is
unsecured.
SECTION 6 . Events
of Default . If any of the following
events (“ Events of
Default ”) shall occur and be
continuing:
(a) the Borrower shall fail to make payment when due of any
principal of the Note;
(b) the Borrower shall fail to make payment when due of any
interest on the Note;
(c) the Borrower or any of its Affiliates shall fail to make any
payment in respect of any Senior Debt when due or within any
applicable grace period;
(d) any event or condition shall occur which shall entitle the
holder of any Senior Debt of the Borrower of any of its Affiliates
to accelerate the maturity of such Senior Debt;
(e) the Borrower or the Guarantor shall become insolvent (however
such insolvency may be evidenced) or proceedings are instituted by
or against the Borrower under the United States Bankruptcy Code or
under any bankruptcy, reorganization or insolvency law or other law
for the relief of debtors (and, with respect to involuntary
insolvency proceedings, such proceedings shall continue undismissed
for 60 days); or
2
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(f)
judgments or orders for the payment of money in
excess of $2,500,000 (which are not covered by insurance) shall be
rendered against the Borrower and such judgments or orders shall
remain unstayed for a period of 10 days;
then , in the case of
any of the Events of Default and during the continuance of such
Event of Default specified above, the Lender may, by written notice
to the Borrower, declare the Note to be forthwith due and payable,
together with accrued interest, whereupon the same shall become
forthwith due and payable, without demand, protest, presentment,
notice of dishonor or any other notice or demand whatsoever, all of
which are hereby waived by the Borrower; provided that in the case of the
Event
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