SECURED PROMISSORY NOTE
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$86,612.00
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June
11, 2009
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FOR VALUE
RECEIVED and as consideration for executing that certain Asset Purchase
Agreement of even date herewith (the “Asset Purchase Agreement”), and the sale
and transfer of the Assets described therein, GROVE POWER, INC., a Florida
corporation (the “Maker”), hereby promises to pay to X.X. XXXXX, INC., a Florida
corporation, or its successors and assigns (the “Payee”), at 0000 XX 00xx Xxxxxx,
Xxxxx, Xxxxxxx or such other address as Payee shall provide in writing to the
Maker for such purpose, a principal sum of Eighty Six Thousand Six Hundred and
Twelve Dollars (U.S. $86,612.00) (the “Principal Amount”).
1. Payments and
Maturity. Xxxxx agrees to repay the Principal Amount of this
secured promissory note (the “Note”) and simple interest accrued thereon over
eighteen (18) months at the rate of eight percent (8%) per annum on the date
eighteen months from the date of this Note, November 11, 2010.
2. No Prepayment
Penalty. The Principal Amount and any accrued and unpaid
interest thereon may be paid by Maker in whole or in part at any time with no
prepayment penalty.
3. Default and
Acceleration. Upon the occurrence of a Default (as defined below), the
Payee shall have the right (in addition to all other rights it may have
hereunder, under the Security Agreement, or under applicable law), exercisable
at the sole option of the Payee, to accelerate the entire outstanding principal
sum remaining due and unpaid plus all accrued and unpaid interest thereon, which
shall be due and payable within thirty (30) Business Days of the date on which
the written notice for the payment therefore provided by the Payee is received
by Maker. If the Maker fails to pay such payment pursuant to this
Section on the date such amount is due in accordance with this Section, the
Maker will pay simple interest on such unpaid and overdue amount at a rate of
eighteen percent (18%) per annum (or such lesser amount permitted by applicable
law), accruing daily from such date until such amount, plus all such interest
thereon, is paid in full.
A
“Default” means any one or more of the following events:
(a) any
failure by Maker to pay any amount hereunder, within fifteen (15) Business Days
of the due date of any such payment;
(b) the
commencement of any liquidation, reorganization, receivership, bankruptcy,
assignment for the benefit of creditors or other debtor-relief proceeding by or
against Maker, which is not discharged or cured by Maker within sixty (60)
days;
(c) the
Maker shall fail to observe or perform any other material covenant, material
agreement or material warranty contained in, or otherwise commit any material
breach of, the Asset Purchase Agreement or the Security Agreement, and such
material failure or material breach shall not, if subject to the possibility of
a cure by the Maker, have been remedied within thirty (30) days after the date
on which written notice of such failure or breach shall have been received by
Maker.
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4. Secured Obligation.
The obligations of Maker under this Note are secured by the Maker’s grant of a
subordinated security interest in and to the Assets (as defined in the Asset
Purchase Agreement) pursuant to and as described in the Security Agreement (as
defined in Section 13). Payee represents and warrants that the Assets
were transferred free and clear of any liens, other than as described herein and
in the Security Agreement, by the Payee to the Maker pursuant to the Asset
Purchase Agreement.
5. No Waiver of Payee’s Rights,
etc. All payments of principal and interest shall be made
without setoff, deduction or counterclaim. No delay or failure on the
part of the Payee in exercising any of its options, powers, or rights, nor any
partial or single exercise of its options, powers or rights shall constitute a
waiver thereof or of any other option, power or right, and no waiver on the part
of the Payee of any of its options, powers or rights shall constitute a waiver
of any other option, power or right. The Maker hereby waives
presentment of payment, protest, and any notices or demands in connection with
the delivery, acceptance, performance, default or endorsement of this
Note. Acceptance by the Payee of less than the full amount due and
payable hereunder, except as otherwise agreed by the parties, shall in no way
limit the right of the Payee to require full payment of all sums due and payable
hereunder in accordance with the terms hereof.
6. Modifications. No
term or provision contained herein may be modified, amended or waived except by
written agreement or consent signed by the party to be bound
thereby.
7. Cumulative Rights and
Remedies; Usury. The rights and remedies of the Payee
expressed herein are cumulative and not exclusive of any rights and remedies
otherwise available. If it shall be found that any interest outstanding
hereunder shall violate applicable laws governing usury, the applicable rate of
interest outstanding hereunder shall be reduced to the maximum permitted rate of
interest under such law.
8. Collection
Expenses. If this obligation is placed in the hands of an
attorney for collection after default, and provided the Payee prevails on the
merits in respect to its claim of default, the Maker shall reimburse Payee for
the reasonable attorneys’ fees and expenses incurred by the Payee in pursuing
collection of this Note.
9. Successors and
Assigns. This Note shall be binding upon the Maker and its successors and
shall inure to the benefit of the Payee and its successors and assigns. The term
“Payee” as used herein, shall also include any endorsee, assignee or other
holder of this Note.
10. Lost or Stolen Promissory
Note. If this Note is lost, stolen, mutilated or otherwise destroyed, the
Maker shall execute and deliver to the Payee a new promissory note containing
the same terms, and in the same form, as this Note. In such event,
the Maker may require the Payee to deliver to the Maker an affidavit of lost
instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.
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11. Due
Authorization. This Note has been duly authorized, executed
and delivered by the Maker and is the legal obligation of the Maker, enforceable
against the Maker in accordance with its terms.
12. Governing
Law. This Note shall be governed by and construed and enforced
in accordance with the internal laws of the State of Florida without regard to
the principles of conflicts of law thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the county of Miami-Dade County, State of Florida, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address in effect for notices to it under this Note and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.
13. Definitions. For the
purposes hereof, the following terms shall have the following
meanings:
“Business Day” means
any day except Saturday, Sunday and any day which shall be a legal holiday or a
day on which banking institutions in the Stat of Delaware of State of California
are authorized or required by law or other government action to
close.
“Person” means a
corporation, an association, a partnership, limited liability company, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
“Security Agreement”
means that certain Security Agreement of even date herewith between Maker and
Payee regarding the grant of a subordinated security interest in the Assets, as
amended, modified or supplemented from time to time in accordance with its
terms.
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IN WITNESS WHEREOF, the Maker has
caused this Secured Promissory Note to be duly executed and delivered as of the
date first set forth above.
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GROVE
POWER, INC.
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/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx
Xxxxxxxx, CFO and Chairman
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Accepted
and agreed:
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XX
XXXXX, INC.
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/s/ Xxxxxx Xxxxx
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Xxxxxx
Xxxxx, President
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