Common use of Note Consideration Clause in Contracts

Note Consideration. The Note in the principal amount of $2,500,000 shall be issued by PESI to the order of Parent. The Note (i) shall be unsecured and subordinated; (ii) shall bear an annual interest rate equal to 6%; (iii) shall be non-negotiable; (iv) may not be sold, transferred or assigned by Parent without the prior written consent of PESI which may be withheld by PESI in PESI’s sole discretion; (v) shall be subject to offset as provided in Section 9.3 hereof; and (vi) shall be payable over a three (3) year period in thirty-six (36) monthly installments of principal and interest, with each monthly installment to be as follows: the principal sum of $69,444.44, plus accrued interest, with the final installment to be in the sum of the remaining unpaid principal balance due under the Note plus accrued interest, due thereon. The first installment shall be payable on the 15th day of the month following the Closing Date and an installment due on the 15th day of each of the next 35 months thereafter. The Note further provides that on the failure of PESI to pay any monthly installment of principal and interest within 30 days when due thereunder (“Default Date”), (x) the annual interest rate will automatically increase (without any action on the part of Parent) as of such Default Date to 12% during the period of such default, and (y) Parent will have the option to declare the Note in default and to be immediately due and payable where upon the Note shall become forthwith due and payable upon written demand received by PESI (“Written Demand Notice”), and Parent will thereafter, at its option and in its sole discretion, have the right to elect by written election delivered to PESI to receive in full and complete satisfaction of all of PESI’s obligations under the Note, as more fully set forth therein, either: (a) the cash amount equal to the sum of the unpaid principal balance owing under the Note and all accrued and unpaid interest thereon, plus the Expenses (as defined in the Note) (the “Payoff Amount”); (b) the number of fully paid and non-assessable shares of PESI restricted Common Stock (the “Payoff Shares”), equal to the quotient determined by dividing the Payoff Amount by the average of the closing prices per share of the PESI Common Stock as reported by the primary national securities exchange or automatic quotation system on which PESI Common Stock is traded during the 30 consecutive trading day period ending on the trading day immediately prior to receipt by PESI of the Written Demand Notice in accordance with Section 9.4 and Parent’s written election to receive Payoff Shares in full and complete satisfaction of PESI’s obligations under the Note; provided, however, that the number of Payoff Shares plus the number of shares of PESI Common Stock to be issued to the Management Investors pursuant to Section 5.21 hereof shall not exceed 19.9% of the voting power of all of PESI voting securities issued and outstanding as of the date of this Agreement. In addition, the Parent shall not, at anytime or for any reason, assign, transfer or convey the Payoff Shares or any portion thereof, if issued by PESI to Parent, to Yorkville.