MASTER PROMISSORY NOTE
(Balloon Payments Required)
This Master Promissory Note (the “Note”) is dated as of (the “Effective Date”) among , a corporation, , a corporation, , a limited liability company, , a limited liability company, , a limited liability company, , a limited liability company, , a limited liability company, , a limited liability company; and collectively with , , , and , the “ Members”), and , a limited liability company.
Recitals
Between the years and , the Members lent the following aggregate amounts to (each, an “ Member Loan” and, collectively, the “ Member Loans”):
Member | Amount of Loans |
|---|---|
TOTAL |
The Members issued the Member Loans in exchange for ’s agreement to repay the principal of the Member Loans without interest and continuing until all outstanding principal is fully paid.
The Members desire to assign all of their rights under the Member Loans, including, but not limited to, all rights to receive payment of principal and interest thereunder, to .
desires to assign its obligations under the Member Loans, including, but not limited to, the obligations to make payments to the Members thereunder, to ;
The parties desire to establish the payment schedule, maturity date, and other rights and obligations of the parties under the Member Loans as set forth herein.
Agreement
NOW THEREFORE, in consideration of the recitals, promises, covenants, warranties, representations, and provisions contained in this Note, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree that the recitals above are true and correct and incorporated herein by reference, and further agree as follows:
ASSIGNMENT AND ASSUMPTION
The Members hereby assign their rights under the Member Loans, including, but not limited to, all rights to receive payment of principal and interest, thereunder, to hereby accepts said assignment. Further, hereby assigns its obligations under the Member Loans, including but not limited to, the obligations to make payments to the Members thereunder, to , and accepts said assignment.
NOTE OBLIGATIONS
At the times and in the manner herein stated, hereby promises to pay to the order of , at such place, either within or without the State of , as may from time to time designate in writing, in legal tender of the United States of America, the aggregate principal sum of () (the “Principal”), in accordance with the terms, conditions, and provisions hereinafter set forth in this Note.
PAYMENT PLAN
No monthly payments shall be due under the Note.
NTEREST RATE
No interest shall accrue on the Principal.
PAYMENTS
shall pay, in legal tender of the United States of America, () of the Principal to (the “First Payment”) on or before the Effective Date. shall thereafter pay, in legal tender of the United States of America, the entire remaining unpaid Principal balance of () to (the “Second Payment”) on or before the date that is months after the Effective Date (the “Maturity Date”). In the event that fails to pay the First Payment and/or the Second Payment by either of the dates due hereunder, then as of the due date of the First Payment and/or the Second Payment and thereafter until such past-due amount(s) is/are paid in full, interest on the outstanding Principal balance hereunder shall accrue at the Default Rate, as defined below.
APPLICATION OF PAYMENTS
All payments received by from or on the account of due hereunder shall be applied by as follows:
First: To pay any and all fees, late fees or other charges due, owing, and/or accrued; and
Second: Payment toward the outstanding Principal balance on this Note.
OFFSETS OR DEDUCTIONS
All payments under the Note shall be made by without any offset, decrease, reduction or deduction of any kind or nature whatsoever, including, but not limited to, any decrease, reduction or deduction for, or on account of, any offset, withholdings, present or future taxes, present or future reserves, imposts or duties of any kind or nature that are imposed or levied by or on behalf of any government and/or taxing agency, body or authority by or for any municipality, state, or nation.
COLLATERAL
This Note shall be secured by a senior priority interest in all of the assets of , all of the assets of , and all of the assets of , including all real property, fixtures, furnishings, machinery, equipment, and other personal property of , , and (the “Collateral”). , , and hereby acknowledge that may file financing statements (including, but not limited to, financing statement) in the , and in the personal property registries of the relevant provincial jurisdictions of , to perfect its security interest in the Collateral. In the event of the occurrence of any event of Default, as hereinafter defined, and such event of Default continues for a period of calendar days after written notice by of such event of Default, with respect to the jurisdiction of the , shall be authorized to execute on its recorded UCC-1 financing statement, including repossession of the Collateral. shall deduct all amounts recovered from the sale of the Collateral from the Principal balance and any interest, fees, and other charges due hereunder.
DEFAULT
Any one or more of the following events or occurrences shall constitute a default under this Note (hereinafter “Default”):
A petition or action for relief shall be filed by or against , , or , pursuant to , or under any other law relating to bankruptcy, insolvency, reorganization, moratorium, creditor composition, arrangement or other relief from debts; the appointment of a receiver, assignee for the benefit of creditors, trustee, custodian or liquidator of or for any property of , , or ; or upon the death, incapacity, insolvency, dissolution, or termination of the business of any of them;
Payment of the First Payment, together with all penalties, fees, or other charges, is not made in full by the Effective Date;
Payment of the Second Payment, together with all penalties, fees, or other charges, is not made in full by the Maturity Date; or
defaults under any of the other Promissory Notes (as defined in that certain Share Exchange Agreement effective dated among the parties hereto (the “Share Exchange Agreement”).
DEFAULT RATE
From and after the occurrence of any Default in this Note, and until such Default has been cured, all outstanding amounts under this Note (including, but not limited to, interest and late charges) shall bear interest at a rate of % annually (the “Default Rate”).
RIGHTS OF ON DEFAULT
Upon the occurrence of any Default, shall be entitled to exercise any one or more of the following remedies without notice or demand:
To accelerate and declare the entire unpaid balance then due and payable under this Note to be immediately due and payable, even though the time of maturity as expressed herein shall not have arrived;
To foreclose upon the Collateral pursuant to this Note and the Share Exchange Agreement; and
To exercise any other right or remedy permitted by law.
PREPAYMENT
may prepay all or any portion of the principal amount of this Note without penalty.
WAIVERS
hereby waives presentment, dishonor, notice of dishonor, protest, notice of protest, and the right to plead any statute of limitations, as a defense to the repayment of all or any portion of this Note, and interest thereon, to the fullest extent allowed by law. No delay, omission and/or failure on the part of in exercising any right and/or remedy hereunder shall operate as a waiver of such right and/or remedy or of any right and/or remedy of .
ATTORNEYS’ FEES
In the event is required to take legal action to enforce the terms of this Note due to an event of Default of , shall be entitled to reimbursement for reasonable costs incurred to enforce the terms of the Note, including attorney fees and other costs paid in the investigation, defense, and settlement in connection with, arising out of, or resulting from ’s event of Default.
LEGAL PROCEEDINGS
This Note shall be governed by and construed exclusively in accordance with the laws of the , applicable to a contract executed and performed exclusively in such state, without giving effect to the conflicts of laws principles thereof. irrevocably consents that any legal action or proceeding against it with respect to this Note shall be brought exclusively in any state or federal court in , and by the execution and delivery of this Note hereby accepts with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.
ASSIGNMENT
may assign ’s rights under this Note, in whole or in part, to any other person or entity, by providing advance written notice to . may not assign its obligations hereunder without the prior written consent of , which may be withheld in its sole discretion.
AMENDMENT
This Note may be amended, changed, modified, terminated and/or canceled only by a written agreement signed by the parties.
AUTHORITY
Each person executing this Note on each of the parties’ behalves, hereby represents and warrants to each other that, by its execution below, the party has the full power, authority and legal right to execute and deliver this Note and that the indebtedness evidenced hereby constitutes a valid and binding obligation of that party without exception or limitation.
NOTICE
Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given only if delivered personally, sent by facsimile, or sent by registered mail, return receipt requested, to the parties as follows:
If to :
If to :
If to :
If to :
If to :
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If to :
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IN WITNESS WHEREOF, the parties have executed this Note on the day and year first above written.
