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$5,600,000
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August 17, 2009
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PURCHASE MONEY
NOTE
FOR VALUE RECEIVED, the undersigned, MTS
ACQUISITION COMPANY, INC., a California corporation (the “
Maker ”), hereby promises to pay to GENERAL
ENVIRONMENTAL MANAGEMENT, INC., a Delaware corporation (“
GEM ”), or registered assigns (hereinafter,
collectively with GEM, the “ Payee ”), the sum
of Five Million Six Hundred Thousand ($5,600,000) Dollars (the
“ Principal ”), with interest thereon, on the
terms and conditions set forth herein.
Payments of principal of, interest on and any
other amounts with respect to this Purchase Money Note (this
“ Note ”) are to be made in lawful money of the
United States of America.
(a)
Interest . This Note shall bear interest (“
Interest ”) on Principal amounts outstanding from time
to time from the date hereof at the rate of eight (8%) percent per
annum; provided , however , that during the
continuance of any Event of Default (as such term is hereinafter
defined), the interest rate hereunder shall be thirteen (13%)
percent per annum. All Interest shall be computed on the
daily unpaid Principal balance of this Note based on a three
hundred sixty (360) day year.
(b)
Payments . On the first day of each calendar
month commencing September 1, 2009 through and including August 1,
2010, accrued Interest on the outstanding Principal shall be due
and payable. Thereafter, Principal and Interest under
this Note shall be payable in thirty-six (36) consecutive equal
monthly installments of Principal and Interest of $174,321.50 each,
with the first installment due and payable on September 1, 2010,
and with subsequent installments due and payable on the first day
of each calendar month thereafter through and including August 1,
2013. To the extent that Principal hereunder shall at
any time bear interest at the default rate provided in paragraph
1(a) above, then, simultaneously with the next scheduled payment of
Principal and Interest, or upon acceleration of this Note, there
shall be due and payable the additional accrued Interest arising by
reason of the increase in the applicable interest rate
hereunder.
(c)
Non-Business Day . If any scheduled payment date
as aforesaid is not a business day in the State of California or
the State of Florida, then the payment to be made on such scheduled
payment date shall be due and payable on the next succeeding
business day, with additional interest on any Principal amount so
delayed for the period of such delay. As used in this
Note, the term “business day” shall mean any day that
is not a Saturday, Sunday or legal holiday in the State of
California.
(a)
Optional Prepayment of Principal . All or any
portion of the unpaid Principal balance of this Note, together with
all accrued and unpaid Interest on the Principal amount being
prepaid, may at the Maker’s option be prepaid in whole or in
part, without premium or penalty, at any time or from time to time,
upon five (5) business days’ prior written notice to the
Payee.
(b)
Mandatory Prepayments of Principal . The entire
Principal balance of this Note, and all accrued and unpaid Interest
hereunder, (i) shall be required to be prepaid upon the
consummation of any Sale (as such term is defined in the Revolving
Credit Agreement described in paragraph 3 below), and (ii) may be
required to be prepaid during the existence of any Event of
Default.
(c)
Application of Payments . Any and all prepayments
hereunder shall be applied first to unpaid accrued Interest on the
Principal amount being prepaid and then to Principal, and the
remaining installments hereunder shall be recalculated so as to
provide for equal monthly payments of Principal and Interest on the
scheduled payment dates through the reminder of the stated payment
term pursuant to paragraph 1(b) above.
3.
Events of Default . The failure of the Maker to
make any payment when due hereunder and the continuance of such
default for five (5) business days after such payment was first due
and payable, or the existence of any event, circumstance or
condition which constitutes or would constitute an Event of Default
under the Revolving Credit Agreement of even date herewith by and
between GEM and the Maker (regardless of whether such Revolving
Credit Agreement has theretofore expired or been terminated) shall
constitute an Event
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