THE CHASE MANHATTAN BANK
PROMISSORY NOTE
$ 470,000.00 Melville, N.Y.
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Date: August 24, ,2000
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On October 23, 2000 (insert specific date or "DEMAND"), for value received,
the undersigned hereby promises to pay to the order of THE CHASE MANHATTAN BANK
(the "Bank") at its offices at 395 North Service Road, Melville, N.Y. Four
hundred seventy thousand and 00/100 DOLLARS with interest payable on
______________________ (specific date) and the _______ day of each
______________ (quarter, month, etc.) thereafter (and at maturity) at a per
annum rate of 1/2% above the Bank's Prime Rate (which shall be the rate of
interest as is publicly announced at the Bank's principal office from time to
time as its Prime Rate), adjusted as of the date of each such change. The
foregoing rate shall be computed for the actual number of days elapsed on the
basis of a 360-day year, but in no event shall be higher than the maximum
permitted under applicable law. Interest on any past due amount, whether at the
due date thereof or by acceleration, shall be paid at a rate of four percent
(4%) per annum in excess of the above stated rate, but in no event higher than
the maximum permitted under applicable law. Time for payment extended by law
shall be included in the computation of interest.
The undersigned hereby grants to the Bank a lien on, security interest in
and right of set-off against all monies, securities and other property of the
undersigned and the proceeds thereof now or hereafter delivered to remain with
or in transit in any manner to the Bank, its correspondents or its agents from
or for the undersigned, whether for safekeeping, custody, pledge, transmission,
collection or for any other purpose, or coming into possession, control or
custody of the Bank, Chase Securities Inc., or any other affiliate of the Bank
in any way, and, also, any balance of any deposit account and credits of the
undersigned with, and any other claims of the undersigned against, the Bank,
Chase Securities Inc., or any other affiliate of the Bank at any time existing
(all of which are collectively called the "Collateral"), as collateral security
for the payment of this note and all other liabilities and obligations now or
hereafter owed by the undersigned to the Bank, contracted with or acquired by
the Bank, whether joint, several, direct, indirect, absolute, contingent,
secured, unsecured, matured or unmatured (all of which are hereafter
collectively called "Liabilities"), hereby authorizing the Bank at any time or
times, without notice or demand, to apply any such Collateral or any proceeds
thereof to any of such Liabilities in such amounts as it in its sole discretion
may select, either contingent, unmatured or otherwise and whether any other
collateral security therefor is deemed adequate or not. Undersigned authorizes
the Bank to deliver to others a copy of this note as written notification of the
undersigned's transfer of a security interest in the Collateral. The Bank
further is authorized at any time or times, without demand or notice to the
undersigned, to transfer to or register in the name of its nominee or nominees
all or any part of the Collateral and to exercise any and all rights, power and
privileges (except that prior to an Event of Default the Bank shall not have the
right to vote or to direct the voting of any Collateral). The collateral
security and other rights described herein shall be in addition to any other
collateral security described in any separate agreement executed by the
undersigned.
<PAGE>
In the event of: default in the prompt payment of any Liabilities; default
in any other indebtedness of the undersigned (which, for the purposes of this
sentence, means the undersigned or any guarantor, surety or endorser of, or any
person or entity which has pledged any of its property to secure, any
Liabilities); complete or partial liquidation or suspension of any business of
the undersigned; dissolution, merger, consolidation or reorganization of the
undersigned; death of or loss of employment by an individual or any member of
any partnership (if the undersigned is an individual or a partnership); failure
to furnish any financial information or to permit inspection of any books or
records at the Bank's request; a representation, warranty or statement of the
undersigned proving false in any material respect when made or furnished;
general assignment for the benefit of creditors or insolvency of the
undersigned; commencement of any proceeding supplementary to any execution
relating to any judgment against the undersigned; attachment, distraint, levy,
execution or final judgment against the undersigned or against the property of
the undersigned; assignment by the undersigned of any equity in any of the
Collateral without the written consent of the Bank; appointment of a receiver,
conservator, rehabilitator or similar officer for the undersigned, or for any
property of the undersigned; tax assessment by the United States Government or
any state or political subdivision thereof against the undersigned; the taking
of possession of, or assumption of control over, all or any substantial part of
the property of the undersigned by the United States Government, or any state or
political subdivision thereof, foreign government (de facto or de jure) or any
agency of any thereof; calling of a meeting of creditors, assignment for the
benefit of creditors or bulk sale or notice thereof; any mortgage, pledge of or
creation of a security interest in any assets without the consent of the holder
of this note; filing of a petition in bankruptcy, commencement of any proceeding
under any bankruptcy or debtor's law (or similar law analogous in purpose or
effect) for the relief, reorganization, composition, extension, arrangement or
readjustment of any of the obligations by or against the undersigned; then, and
in any of those events (each, an "Event of Default"), all Liabilities, although
otherwise unmatured or contingent, shall forthwith become due and payable
without notice or demand and notwithstanding anything to the contrary contained
herein or in any other instrument. Further, acceptance of any payments shall not
waive or affect any prior demand or acceleration of these Liabilities, and each
such payment made shall be applied first to the payment of accrued interest,
then to the aggregate unpaid principal or otherwise as determined by the Bank in
its sole discretion. The undersigned hereby irrevocably consents to the in
personam jurisdiction of the federal and/or state courts located within the
State of New York over controversies arising from or relating to this note or
the Liabilities and irrevocably waives trial by jury and the right to interpose
any counterclaims or offset of any nature in any such litigation. The
undersigned further irrevocably waives presentment, demand, protest, notice of
dishonor and all other notices or demands of any kind in connection with this
note or any Liabilities. The undersigned shall be jointly and severally liable
hereon.
The Bank may, at its option, at any time when in the judgment of the Bank
the Collateral is inadequate or the Bank deems itself insecure, or upon or at
any time after the occurrence of an Event of Default, proceed to enforce payment
of the same and exercise any of or all the rights and remedies afforded the Bank
by the Uniform Commercial Code (the "Code") or otherwise possessed by the Bank.
Any requirement of the Code for reasonable notice to the undersigned shall be
deemed to have been complied with if such notice is mailed, postage prepaid, to
the undersigned and such other persons entitled to notice, at the addresses
shown on the records of the Bank at least four (4) days prior to the time of
sale, disposition or other event requiring notice under the Code.
<PAGE>
The undersigned agrees to pay to the Bank, as soon as incurred, all costs
and expenses incidental to the care, preservation, processing, sale or
collection of or realization upon any of or all the Collateral or incurred in
connection with the enforcement or collection of this note, or in any way
relating to the rights of the Bank hereunder, including reasonable inside or
outside counsel fees and expenses. Each and every right and remedy hereby
granted to the Bank or allowed to it by law shall be cumulative and not
exclusive and each may be exercised by the Bank from time to time and as often
as may be necessary. The undersigned shall have the sole responsibility for
notifying the Bank in writing that the undersigned wishes to take advantage of
any redemption, conversion or other similar right with respect to any of the
Collateral. The Bank may release any party (including any partner or any
undersigned) without notice to any of the undersigned, whether as co-makers,
endorsers, guarantors, sureties, assigns or otherwise, without affecting the
liability of any of the undersigned hereof or any partner of any undersigned
hereof.
Upon any transfer of this note, the undersigned hereby waiving notice of
any such transfer, the Bank may deliver the Collateral or any part thereof to
the transferee who shall thereupon become vested with all the rights herein or
under applicable law given to the Bank with respect thereto and the Bank shall
thereafter forever be relieved and fully discharged from any liability or
responsibility in the matter; but the Bank shall retain all rights hereby given
to it with respect to any Liabilities and Collateral not so transferred. No
modification or waiver of any of the provisions of this note shall be effective
unless in writing, signed by the Bank, and only to the extent therein set forth;
nor shall any such waiver be applicable except in the specific instance for
which given. This agreement sets forth the entire understanding of the parties,
and the undersigned acknowledges that no oral or other agreements, conditions,
promises, understandings, representations or warranties exist in regard to the
obligations hereunder, except those specifically set forth herein.
If the undersigned is a partnership, the agreement herein contained shall
remain in force and applicable, notwithstanding any changes in the individuals
composing the partnership or any release of any partner or partners and their
partners shall not thereby be released from any liability. If this note is
signed by more than one party, the terms "undersigned", as used herein, shall
include the "undersigned and each of them" and each undertaking herein contained
shall be their joint and several undertaking, provided, however, that in the
phrases "of the undersigned", "by the undersigned", "against the undersigned",
"for the undersigned", "to the undersigned" and "on the undersigned", the term
"undersigned" shall mean the "undersigned or any of them"; and the Bank may
release or exchange any of the Collateral belonging to any of the parties hereto
and it may renew or extend any of the liabilities of any of them and may make
additional advances or extensions of credit to any of them or release or fail to
set off any deposit account or credit any of them or grant other indulgences to
any of them, all from time to time, before or after maturity hereof, with or
without further notice to or assent from any of the other parties hereto. Each
reference herein to the Bank shall be deemed to include its successors,
endorsees and assigns, in whose favor the provisions hereof shall also inure.
Each reference herein to the undersigned shall be deemed to include the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned, all of whom shall be bound by the provisions hereof.
<PAGE>
The provisions of this note shall be construed and interpreted and all
rights and obligations hereunder determined in accordance with the laws of the
State of New York, and, as to interest rates, applicable Federal law.
/s/ Vincent DiSpigno
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Address: PWR Systems, Inc.
3512 Veterans Memorial Hwy
Bohemia, NY 11716
