Promissory Note
Exhibit
10.5
Dated: August
13, 2008
Between:
Freedom Environmental Services, Inc. ("Borrower") and;
Xxxxx
Xxxxxxx (Lender)
This
Promissory Note (the "Note") is made and executed as of the date referred to
above, by and between Freedom Environmental Services, Inc. and Xxxxx Xxxxxxx. By
this Note, the Borrower promises and agrees to pay to the order of Lender the
aggregate unpaid principal amount of all funds advanced by Lender to Borrower or
on behalf of Borrower, together with interest thereon from the date each advance
is made until paid in full, both before and after judgment, at the rate of
twelve percent (12%) per annum, simple interest. It is anticipated the principal
advance amount of the note will be six hundred thousand dollars($600,000).
Interest shall be paid monthly, in arrears. Borrower shall have the right, with
approval of Lender, to accrue interest without penalty.
Payment in
whole or part may occur at any time hereunder without penalty; provided that any
such partial prepayment shall not operate to postpone or suspend the obligation
to make, and shall not have the effect of altering the time for payment of the
remaining balance of the Note as provided for above, unless and until the entire
obligation is paid in full. All payments received hereunder shall be applied to
interest first, then principal. Lender shall have the option to accept stock in
Borrower, at 50% of the bid price on date of execution, as payment of principal
balance and any accrued interest.
The
principal balance will be due and payable no later than December 31,
2010.
An event
of default will occur if any of the following events occurs:
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D.
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failure
to pay any principal or interest hereunder within ten (10) days after the
same becomes due;
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E.
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filing
by Borrower of a voluntary petition in bankruptcy seeking reorganization,
arrangement or readjustment of debts, or any other relief under the
Bankruptcy Code as amended or under any other insolvency act or law, state
or federal, now or hereafter existing;
or
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F.
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filing
of an involuntary petition against Borrower in bankruptcy seeking
reorganization, arrangement or readjustment of debts, or any other relief
under the Bankruptcy Code as amended, or under any other insolvency act or
law, state or federal, now or hereafter existing, and the continuance
thereof for sixty (60) days un-dismissed, un-bonded, or
un-discharged.
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Upon the
occurrence of an event of default as defined above, Lender may declare the
entire unpaid principal balance, together with accrued interest thereon, to be
immediately due and payable without presentment, demand, protest, or other
notice of any kind. To the extent permitted by law, Borrower waives any rights
to presentment, demand, protest, or notice of any kind in connection with this
Agreement. No failure or delay on the part of Lender in exercising any right,
power, or privilege hereunder will preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The rights and
remedies provided herein are cumulative and not exclusive of any other rights or
remedies provided at law or in equity. Borrower agrees to pay all costs of
collection incurred by reason of the default, including court costs and
reasonable attorney's fees.
Any notice
or demand to be given to the parties hereunder shall be deemed to have been
given to and received by them and shall be effective when personally delivered
or when deposited in the U.S. mail, certified or registered mail, return receipt
requested, postage prepaid, and addressed to the party at his or its last known
address, or at such other address as the one of the parties may hereafter
designate in writing to the other party.
The
Borrower hereof waives presentment for payment, protest, demand, notice of
protest, notice of dishonor, and notice of nonpayment, and expressly agrees that
this Note, or any payment hereunder, may be extended from time to time by the
Lender without in any way affecting its liability hereunder.
In the
event any payment under this Note is not made at the time and in the manner
required, the Borrower agrees to pay any and all costs and expenses which may be
incurred by the Lender hereof in connection with the enforcement of any of its
rights under this Note or under any such other instrument, including court costs
and reasonable attorneys' fees.
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All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement 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 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
or inconvenient venue for such proceeding. If either party shall commence an
action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
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