PROMISSORY NOTE AND SECURITY AGREEMENT
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$66,000 Dated: February 11, 1994
FOR VALVE RECEIVED Xxxxxxxxxxx Xxx, an individual residing at 0 Xxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Maker") agrees to pay to the order of RF
Power Produce, Inc. a New Jersey Corporation, having its principal business
office at 000 Xxxxxxxxx-Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company"
or "Payee"), the principal sum of Sixty-Six Thousand Dollars ($66,000) (the
"Principal Sum"), plus interest accrued on the unpaid balance of the Principal
Sum outstanding from time to time compounded annually at the prime rate of
National Westminster Bank NJ in effect on the first day of each calendar quarter
(or portion thereof) during which this Note is outstanding, calculated based on
a 360 day year and the actual number of days elapsed, on the terms and
conditions set forth below:
1. Payment. The Principal Sum shall be payable in three (3)
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consecutive annual installments of Twenty-Two Thousand Dollars ($22,000) each.
Each installment shall be due on the 10th day of each February during the term
hereof, commencing February 10, 1995 and continuing until February 10, 1997 at
which time the entire unpaid principal balance of this Note, all interest
accrued thereon and all other sums payable hereunder shall be due and payable in
full.
Interest on the outstanding Principal Sum shall be payable
simultaneously with the payment of each installment of principal.
2. Place of Payment. All payments due under this Note shall be
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payable in cash, wire transfer or other immediately available funds without
set-off or deduction, by direct delivery to Payee at the address of the Payee
set forth in the heading hereof or such other place as Payee, from time to
time, may designate in writing.
3. Prepayment. Maker shall have the right to prepay the Principal
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Sum of this Note, in whole or in part, at any time, without notice and without
prepayment penalty or premium. Each partial prepayment of the Principal Sum
shall be accompanied by accrued interest on the amount prepaid to the date of
prepayment. All partial prepayments shall be applied to installments of the
Principal Sum in the inverse order in which such installments of the Principal
Sum are due under this Note. Maker's partial prepayments of the Principal Sum
shall not effect in any way whatsoever the due dates or dollar amounts of any
subsequent schedule of Principal Sum payments in regard to this Note unless and
until Maker has paid in full the Principal Sum of this Note.
4. Security; Escrow Agent.
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(a) As collateral security for payment of the Principal Sum and
all other obligations of Maker under the Stock Purchase Agreement between Maker
and Payee, dated February 11, 1994 (the "Stock Purchase Agreement"), Maker
hereby pledges and creates a first
priority security interest in all of his shares (the "Shares") of the Company,
to Payee, together with all "proceeds" (as defined in Section 9-306(a) of the
Uniform Commercial Code as adopted in Pennsylvania) thereof, including, without
limitation, all dividends or other income from the Shares. In furtherance of
this security interest, Maker agrees to place his Share certificates (including
any additional Share certificates of the Company acquired by Maker as a result
of subsequent stock dividends, splits, mergers or other actions) and undated
stock powers covering such certificates duly executed in blank and endorsed for
assignment in accordance with the terms of this Note, in escrow with Payee as
Escrow Agent ("Escrow Agent"), to hold such certificates and assignments and act
with respect thereto, in accordance with this Note.
(b) Subject to the provisions of Paragraph 6 hereof, the Escrow
Agent shall distribute the Share certificates:
(i) to Maker in accordance with joint written instructions
of Payee and Maker upon full payment of the Principal Sum and accrued interest,
and satisfaction and termination of this Note;
(ii) to Payee in accordance with Payee's written
instructions and in accordance with Paragraph 6; or
(iii) pursuant to an order, decree or judgment by a court of
competent jurisdiction which, by lapse of time or otherwise, shall no longer be
subject to appeal or review.
(c) If at any time the Escrow Agent determines that it is
uncertain as to the disposition of all or any portion of the Share certificates
held in escrow, it may continue to hold the Share certificates or deposit them
in any court of competent jurisdiction pending the final determination of
disputes regarding the disposition of the Share certificates between Maker and
Payee, in which case all of the Escrow Agent's costs and expenses in connection
with the making of such deposit (including reasonable attorneys' fees) shall be
paid to the Escrow Agent in equal amounts by Maker and Payee, provided, however,
that Maker and Payee are jointly and severally liable for such costs and
expenses as set forth in Paragraph 4(d), below.
(d) Maker and Payee acknowledge and agree that the Escrow Agent
shall not be liable for the conduct of its duties except in the event of
conviction and final adjudication of willful misconduct or final adjudication of
gross negligence, and shall be indemnified by each of them, jointly and
severally, for any costs of expenses, including attorneys' fees, arising out of
conduct of such escrow, except in the event of such a finding of willful
misconduct or gross negligence.
(e) Maker acknowledges, and waives any rights arising therefrom,
that Payee is both the Payee and Escrow Agent pursuant hereto and may have
conflicting duties and loyalties in connection therewith.
5. Cash Dividends; Voting Rights. Unless a default shall have
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occurred and be continuing and Payee shall have given notice to the Maker of
Payee's intent to exercise its
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corresponding rights pursuant to Paragraph 6 below, the Maker shall be permitted
to receive all cash dividends, if any, paid in the normal course of business of
the Company and consistent with past practice in respect of the Share
certificates and to exercise all voting and corporate rights with respect to the
Share certificates, provided, however, that no vote shall be cast or corporate
right exercised or other action taken by Maker, or given effect by the Company
or anyone else, which, in Payee's reasonable judgment, would impair Payee's
security interest under Paragraph 4 or be inconsistent with any of the Stock
Purchase Agreement, this Note, any other documents related thereto, or any of
the above, including, without limitation, any merger, exchange or sale of the
Shares.
6. Default.
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(a) The occurrence of any one or more of the following events
with respect to Maker shall, at Payee's option, constitute an event of default:
(i) the failure of Maker to make payment to Payee of any sum or sums due under
this Note within ten (10) days after they are due; (ii) the commencement of any
proceeding in bankruptcy, rehabilitation, creditor adjustment, or insolvency by
or against Maker which is not discharged with forty-five (45) days thereafter;
(iii) a general assignment by Maker for the benefit of creditors or others; (iv)
the appointment of a trustee, receiver, executor, conservator, liquidator, or
other judicial representative for Maker or any of Maker's property; (v) the
attachment of any of Maker's property which is not released or provided for to
the satisfaction of Payee within ten (10) days of such attachment or; (vi) the
failure to Maker and Company with any of the provisions of the Stock Purchase
Agreement or of this Note. Maker agrees to provide notice to Escrow Agent and
Payee of the occurrence of any of the events described in (ii) through (vi),
above, within twenty-four (24) hours thereof.
(b) In the event of a default pursuant to subparagraph (a) of
this Section, Payee may elect to notify both the Escrow Agent and Maker in
writing that there has been a default and if such default is not cured by Maker
within ten (10) days of receipt by Maker of his copy of such notice, Payee may
(A) have the certificates representing the Shares, and all assignments relative
there to, delivered and assigned by Escrow Agent to Payee and to be registered
in Payee's name, in which event Payee shall return to Maker the lesser of the
fair market value of the Shares represented by the certificates to be registered
or the aggregate purchase price paid to such date pursuant to the Stock Purchase
Agreement and this Note, in both cases, less the aggregate of all dividends and
distributions paid to Maker to such date on the Shares or (B) accelerate the
payment of the unpaid Principal Sum due under this Note, and all accrued
interest, to the date of such acceleration and to do any and all other things
which Payee deems necessary to enforce the provisions of this Note with respect
to any such unpaid amount, as permitted by applicable law; provided, however,
that at such time as the unpaid Principal Sum due is fully paid to Payee, Payee
shall instruct Escrow Agent to deliver to Maker the certificates representing
the Shares, and all assignments relative thereto;
In the event that Maker disputes the existence of a default which is the
subject of the notice to the Escrow Agent under Paragraph 6, he shall notify the
Escrow Agent and Payee within ten (10) days of the existence of such dispute,
and the Escrow Agent shall continue to
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hold the Share certificates or deposit them in any court of competent
jurisdiction as provided in Paragraph 4(c) herein.
(c) All of Maker's voting rights with respect to the Shares,
and all other rights of Maker in the Company, shall be suspended upon the
occurrence of an event of default under subparagraph (a) of this Section, except
that the right to receive dividends from the Company shall not be suspended,
until either the default is cured or the delivery and assignment of Shares
occurs pursuant to Section 6(b)(i).
(d) The failure by Payee to declare, or the delay in declaring,
a default under subparagraph (b), above, shall not in any way constitute a
waiver, or otherwise prejudice, Payee's rights to assert default with respect to
any such occurrence at some later time or to take any other action pursuant to
this Note with respect to such or any other occurrence.
7. Severability. If any provision of this Note is held to be
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invalid or unenforceable by a Court of competent jurisdiction, the other
provisions of this Note shall remain in full force and effect and shall be
construed liberally in favor of Payee in order to effectuate the provisions of
this Note.
8. Governing Law. This Note shall be governed by and construed
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according to the laws of the State of New Jersey.
9. Successors and Assigns. The provisions of this Note shall be
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binding upon and inure to the benefit of Maker and Payee and their respective
heirs, executors or administrators and successors and assigns.
10. No Presentment, Etc. Maker hereby waives presentment for
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payment, demand, notice of demand, notice of nonpayment or dishonor, protest and
notice of protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of
this Note. Maker agrees that, other than as set forth in this Note or the Stock
Purchase Agreement, Maker's liability shall be unconditional, without regard to
the liability of any other party, and shall not be affected in any manner by any
indulgence, extension of time, renewal, waiver or modification granted or
consented to by Payee. Maker agrees that additional makers, endorsers,
guarantors, or sureties may become parties hereto without notice to Maker or
affecting its liability hereunder.
11. Rights Cumulative; No Waiver. All rights and remedies of Payee
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under this Note and any applicable law are separate and cumulative, and the
exercise of one shall not limit or prejudice the exercise of any other such
rights or remedies. The enumeration in this Note of any waivers or consents by
Maker shall not be deemed exclusive of any additional waivers or consents by
Maker which may be deemed to exist in law or equity. No delay or omission by
Payee in exercising any right or remedy shall operate as a waiver thereof. No
waiver of any rights and remedies hereunder, and no modification or amendment of
this Note, shall be deemed made by Payee unless in writing and duly signed by
Payee. Any such written waiver shall apply only to the particular instance
specified therein and shall not impair the further exercise of such
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right or remedy or of any other right or remedy of Payee, and no single or
partial exercise of any right or remedy under this Note shall preclude any
other or futher exercise thereof or any other right or remedy.
12. Notices. All notices, requests, demands and other communications
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hereunder shall be deemed to have been duly given or received if delivered,
telegraphed, telecopied or mailed by certified or registered mail to the parties
at the addresses first above written or to such other address of which any party
may notify the other party as provided above.
13. Assignment. Payee shall not assign or transfer his rights under
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this Note without the prior consent of Maker.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have executed this Note as of the date and year set forth above.
Attest: [SIGNATURE APPEARS HERE] /s/ Xxxxxxxxxxx Xxx
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Xxxxxxxxxxx Xxx,
ACCEPTED:
RF POWER PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx,
President
AMENDMENT TO
PROMISSORY NOTE AND SECURITY AGREEMENT
THIS AMENDMENT, is entered into on this 21st day of January, 1997 by and
between RF Power Products, Inc., a New Jersey Corporation, (the "Company"), and
Xxxxxxxxxxx Xxx, an individual (the "Maker").
WHEREAS, the Company and the Maker are parties to the Promissory Note
and Security Agreement dated February 11, 1994 (the "Promissory Note and
Security Agreement").
WHEREAS, the Company and the Maker wish to amend the Promissory Note and
Security Agreement as set for herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenant set forth herein, the parties hereby agree as follows:
1. The introduction of the Promissory Note and Security Agreement is hereby
deleted and replaced in its entirety as follows:
"FOR VALUE RECEIVED Xxxxxxxxxxx Xxx, an individual residing at 0 Xxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Maker") agrees to pay to the order of RF
Power Products, Inc., a New Jersey Corporation, having its principal
business office at 0000 Xxxxxx Xxx Xxx, Xxxxxxx, Xxx Xxxxxx 00000 (the
"Company" or "Payee"), the principal sum of Sixty-Six Thousand Dollars (the
"Principal Sum"), plus interest accrued on the unpaid balance of the
Principal Sum outstanding from time to time compounded annually at the rate
of 6.5% calculated on a 360 day year and the actual number of days elapsed,
on the terms and conditions set forth below:"
1. Section 1 of the Promissory Note and Security Agreement is hereby
deleted and replaced in its entirety as follows:
"1. Payment The Principal Sum shall be payable in three (3) annual
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installments of Twenty-Two Thousand Dollars (22,000) each. The first
installment shall be due on February 10, 1995, the second installment shall
be due on February 10, 1996, and the third installment shall be due February
10, 2000, at which time the entire unpaid principal balance of this Note,
all interest accrued thereon and all other sums payable hereunder shall be
due and payable in full."
2. Except as expressly modified hereby, the Promissory Note and Security
Agreement shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties, hereto have executed this Amendment as
of the date first above written.
RF POWER PRODUCTS, INC.
/s/ Xxxxxxxxxxx Xxx By: /s/ Xxxxxx Xxxxx
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Xxxxxxxxxxx Xxx Name: Xxxxxx Xxxxx
Title: President
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