Form of Replacement Call Note SUBORDINATED PROMISSORY NOTE
EXHIBIT
10.11
Form of Replacement Call Note
SUBORDINATED PROMISSORY NOTE
| $1,000,000.00 | November 15, 2007 |
For value received and intending to be legally bound, Xxxxx Ecology Oil Salvage, Inc., a New
Jersey corporation, MidAtlantic Recycling Technologies, Inc., a Delaware corporation, and Rezultz,
Incorporated, a New Jersey corporation (collectively, “Maker”), hereby jointly and severally
promise to pay, to the order of Xxxxxxx X. Xxxx (“Payee”), the principal sum of One Million Dollars
($1,000,000) lawful money of the United States of America, in accordance with the terms and
conditions set forth below, together with interest from and after the date hereof on the
outstanding principal balance at a rate per annum of six and seventy seven one hundredths percent
(6.77%) (the “Interest Rate”).
Interest hereunder shall be computed on the basis of actual days elapsed over the period of a
360-day year.
From the date hereof until December 31, 2009, interest shall accrue hereunder at the Interest
Rate and shall accrete to and thereby increase and become a part of the principal amount of this
Note (hereinafter the “Accreted Principal Balance”).
Commencing on January 1, 2010, the Accreted Principal Balance of this Note, shall accrue
interest at the Interest Rate and such interest on the Accreted Principal Balance, will be paid
monthly, in arrears until all obligations under this Note have been fully paid, satisfied and
discharged.
The Accreted Principal Balance of this Note shall be paid as follows: (i) Three Hundred Thirty
Three Thousand Dollars ($333,000) shall be due and payable on December 31, 2009, and (ii) the
remaining Accreted Principal Balance shall be due and payable on December 31, 2010, together with
any accrued unpaid interest as of such date.
Maker shall have the right to prepay this Note in whole or in part at any time without premium
or penalty.
Each of the following events (each, an “Event of Default”) shall constitute an event of
default hereunder: (a) Maker shall fail to perform any of the terms of this Note; or (b) the
filing of a petition in bankruptcy by or against Maker which is not discharged within sixty (60)
days.
Upon the occurrence of an Event of Default, the entire unpaid principal balance of this Note
shall, at the option of Payee, become due and payable immediately and payment of the same may be
enforced and recovered in whole or in part.
Maker hereby waives presentment for payment, demand, notice of nonpayment, notice of protest
and protest of this Note, and all other notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Note.
Notwithstanding anything to the contrary set forth herein, Xxxxx hereby agrees that all
payments on account of the principal and interest indebtedness under this Note (i) are subject to
the right of setoff by Maker under that certain Stock Purchase Agreement entered into among Maker
and Payee on February 13, 2007, as amended, and (ii) shall be subordinate and subject in right of
payment and priority to the Senior Indebtedness. As used herein, “Senior Indebtedness” shall mean
any indebtedness, liabilities and other obligations of Pure Earth, Inc., Maker and their respective
subsidiaries (whether as primary obligor or as guarantor) to any person with respect to any working
capital, revolving credit or other line of credit facility, any term loan facility, or any other
extension of credit by a bank, insurance company or other financial institution engaged in the
business of lending money (collectively, “Financial Institutions”). The terms “indebtedness,”
“liabilities” and “obligations” are used herein in their most comprehensive sense and include any
and all advances, debts, obligations and liabilities, now existing or hereafter arising, whether
voluntary or involuntary and whether due or not due, absolute or contingent, liquidated or
unliquidated,
determined or undetermined. In furtherance of the foregoing, Xxxxx hereby agrees to execute
and deliver such subordination agreements as may be requested by Maker or its Financial
Institutions from time to time.
If any provision hereof is found by a court of competent jurisdiction to be prohibited or
unenforceable, it shall be ineffective only to the extent of such prohibition or unenforceability,
and such prohibition or unenforceability shall not invalidate the balance of such provision to the
extent it is not prohibited or unenforceable, nor invalidate the other provisions hereof.
This Note may not be assigned or pledged by either Maker or Payee.
This Note shall be construed and enforced in accordance with and governed by the laws of the
Commonwealth of Pennsylvania, without giving effect to principles of conflicts of laws.
IN WITNESS WHEREOF, Xxxxx has duly executed this Note as of the day and year first above
written.
| MIDATLANTIC RECYCLING TECHNOLOGIES, INC. | ||||
By:
|
/s/ Xxxxx Xxxxxxxxxx
|
|||
| XXXXX ECOLOGY OIL SALVAGE, INC. | ||||
By:
|
/s/ Xxxxx Xxxxxxxxxx | |||
| Xxxxx Xxxxxxxxxx, Treasurer | ||||
| REZULTZ, INCORPORATED | ||||
By:
|
/s/ Xxxxx Xxxxxxxxxx | |||
| Xxxxx Xxxxxxxxxx, Treasurer | ||||
| AGREED AND ACCEPTED: | ||||
| /s/ Xxxxxxx X. Xxxx | ||||
| Xxxxxxx X. Xxxx | ||||
