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Exhibit
10.8
THE SECURITIES REPRESENTED BY THIS
PROMISSORY NOTE HAVE BEEN ACQUIRED FOR INVESTMENT FOR THE
HOLDER’S OWN ACCOUNT AND NOT WITH A VIEW TO OR FOR SALE IN
CONNECTION WITH ANY DISTRIBUTION OF THE SECURITIES. THE SECURITIES
HAVE NOT BEEN REGISTERED OR QUALIFIED, AS APPLICABLE, UNDER THE
SECURITIES ACT OF 1933 (“SECURITIES ACT”) OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS (“BLUE SKY LAWS”). AN
OFFER TO SELL OR TRANSFER OR THE SALE OR TRANSFER OF THESE
SECURITIES IS UNLAWFUL UNLESS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE BLUE
SKY LAWS, OR UNLESS AN EXEMPTION FROM REGISTRATION AND/OR
QUALIFICATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS
IS AVAILABLE AND AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE ISSUER OF THE SECURITIES IS PROVIDED TO THE
ISSUER TO THE EFFECT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY
LAWS.
PROMISSORY
NOTE
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| $1,429,400 |
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Norcross, Georgia |
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March 1, 2007 |
FOR VALUE RECEIVED, the
undersigned, Alliance HealthCard, Inc., a Georgia corporation
(hereinafter called “Maker”), does hereby promise to
pay to the order of Susan Matthews or his assigns (hereinafter
called “Holder,” which term shall be construed to
include any endorsees, successors or assigns) at 900 36th Avenue,
NW, Norman, Oklahoma 73072 or such other place as Holder may
designate in writing, in lawful money of the United States of
America, the principal sum of One Million Four Twenty-Nine Thousand
Four Hundred Dollars ($1,429,400), together with interest on unpaid
principal balance at the rates hereinafter set forth, such
principal sum and interest to be paid as provided in Article I
hereof. This Note is being issued pursuant to that Agreement and
Plan of Merger among Maker, BMS Holding Company, Inc. (“BMS
Holdings”) and certain of BMS Holdings’ affiliates
dated as of December 26, 2006 (the “Merger
Agreement”) and is subject to the terms thereof.
1.00 INTEREST AND
PRINCIPAL
1.01 Interest . The
interest rate to be paid on the outstanding principal balance of
the indebtedness evidenced hereby shall be one percent
(1%) per annum (the “Contract Rate”), calculated
on the basis of a year of 365 or 366 days, as the case may be, for
the actual number of days elapsed, commencing on March 1,
2007.
1.02 Payment of Principal
and Interest . Principal and accrued interest shall be due and
payable in twelve (12) consecutive quarterly installments
commencing on May 15, 2007 and on each
August 14, November 14, February 14 and
May 15 of each year thereafter and in full on
February 14, 2010, if not previously paid. Any payment of
principal and interest shall be applied first to the payment of
interest due on the outstanding principal sum and the balance
thereof shall be applied in reduction of principal sum.
Notwithstanding the foregoing and any other provision in this Note,
in the event that the consolidated earnings before interest, income
taxes, depreciation and amortization of Maker, determined in
accordance with generally accepted accounting principles for each
of the fiscal years ending on September 30, 2007, 2008 and
2009 shall be less (“Actual EBITDA”) than Four Million
Two Hundred Dollars ($4,200,000) (the “Targeted
EBITDA”), then the principal amount of this Note shall be
reduced by Holder’s Pro Rata Share of an amount equal to the
percentage by which the Actual EBITDA for each such period falls
short of the Targeted EBITDA and the adjusted principal balance of
this Note will then be amortized over the remaining term of the
Note in accordance with the foregoing payment terms. For purposes
of this Note, “Pro Rata Share” means a Holder’s
prop
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