Contract
THIS
NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
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No.
1
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U.S.
2,00,000.00
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Original
Issue Date: February 11, 2008
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Holder:
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Solar
Thin Power, Inc.
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Address:
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00
Xxxxxxxx Xxxx.
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Xxx
Hills, New York, 11746
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FOR
VALUE
RECEIVED, SOLAR THIN FILMS, INC. a Delaware corporation, having its principal
place of business at 00 Xxxxxxxx Xxxx., Xxx Xxxxx, Xxx Xxxx 00000 (the
“Company”),
promises to pay to SOLAR THIN POWER, INC., a Nevada corporation having its
principal place of business at 00 Xxxxxxxx Xxxx., Xxx Xxxxx, Xxx Xxxx 00000
(the
“Holder”)
or its
registered assigns or successors in interest, the sum of One Million Five
Hundred Thousand Dollars ($1,500,000), together with any accrued and unpaid
interest hereon, on February 11, 2009 (the “Maturity
Date”)
if not
sooner indefeasibly paid in full.
ARTICLE
I
CONTRACT
RATE AND AMORTIZATION
1.1 Interest
Rate.
Subject
to Sections 3.2 and 4.10, interest payable on the outstanding principal amount
of this Note (the “Principal
Amount”)
shall
accrue at a rate per annum equal to the “prime rate” published in The
Wall Street Journal
from
time to time (the “Interest
Rate”).
The
Interest Rate shall be increased or decreased as the case may be for each
increase or decrease in the prime rate in an amount equal to such increase
or
decrease in the prime rate; each change to be effective as of the day of the
change in the prime rate. Interest shall be (a) calculated on the basis of
a 360
day year, and (b) payable upon maturity.
1.2 Reserved.
1.3 Balloon
Payment.
Upon
maturity, the Company shall make a balloon payment of all outstanding principal
together with any accrued and unpaid interest and any and all other unpaid
amounts which are then owing by the Company to the Holder under this
Note.
ARTICLE
II
REDEMPTION
2.1 Optional
Redemption in Cash.
The
Company may prepay this Note (“Optional
Redemption”)
by
paying to the Holder a sum of money equal to one hundred percent (100%) of
the
principal amount outstanding at such time together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holder arising under this Note (the “Redemption
Amount”)
outstanding on the Redemption Payment Date (as defined below). The Company
shall
deliver to the Holder a written notice of redemption (the “Notice
of Redemption”)
specifying the date for such Optional Redemption (the “Redemption
Payment Date”),
which
date shall be within seven (7) business days after the date of the Notice of
Redemption (the “Redemption
Period”).
On
the Redemption Payment Date, the Redemption Amount must be paid in good funds
to
the Holder. In the event the Company fails to pay the Redemption Amount on
the
Redemption Payment Date as set forth herein, then such Redemption Notice will
be
null and void.
ARTICLE
III
EVENTS
OF DEFAULT
3.1 Events
of Default.
The
occurrence of any of the following events set forth in this Section 3.1 shall
constitute an event of default (“Event
of Default”)
hereunder:
(a) Failure
to Pay.
The
Company fails to pay when due any amounts when due or other fees hereon in
accordance herewith, when due, and, in any such case, such failure shall
continue for a period of five (5) days following the date upon which any such
payment was due.
(b) Breach
of Covenant.
The
Company or any of its subsidiaries breaches any covenant or any other term
or
condition of this Note in any material respect and such breach, if subject
to
cure, continues for a period of fifteen (15) days after the occurrence
thereof.
(c) Breach
of Representations and Warranties.
Any
representation, warranty or statement made or furnished by the Company or any
of
its subsidiaries in this Note, shall at any time be false or misleading in
any
material respect on the date as of which made or deemed made.
(d) Reserved;
(e) Material
Adverse Effect.
Any
change or the occurrence of any event which could reasonably be expected to
have
a Material Adverse Effect;
(f) Bankruptcy.
The
Company or any of its subsidiaries shall (i) apply for, consent to or
suffer to exist the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of
its property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file
a
petition seeking to take advantage of any other law providing for the relief
of
debtors, (vi) acquiesce to, without challenge within ten (10) days of the filing
thereof, or failure to have dismissed, within thirty (30) days, any petition
filed against it in any involuntary case under such bankruptcy laws, or (vii)
take any action for the purpose of effecting any of the foregoing;
(g) Judgments.
Attachments or levies in excess of $100,000 in the aggregate are made upon
the
Company or any of its Subsidiary’s assets or a judgment is rendered against the
Company’s property involving a liability of more than $100,000 which shall not
have been vacated, discharged, satisfied, stayed or bonded within thirty (30)
days from the entry thereof;
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(h) Insolvency.
The
Company or any of its Subsidiaries shall admit in writing its inability, or
be
generally unable, to pay its debts as they become due or cease operations of
its
present business;
(i) Change
of Control.
A
Change of Control (as defined below) shall occur with respect to the Company,
unless Holder shall have expressly consented to such Change of Control in
writing. A “Change of Control” shall mean any event or circumstance as a result
of which (i) any “Person” or “group” (as such terms are defined in Sections
13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other
than the Holder, is or becomes the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35%
or
more on a fully diluted basis of the then outstanding voting equity interest
of
the any Company, (ii) the Board of Directors of the Company shall cease to
consist of a majority of the Company’s board of directors on the date hereof (or
directors appointed by a majority of the board of directors in effect
immediately prior to such appointment) or (iii) the Company or any of its
Subsidiaries merges or consolidates with, or sells all or substantially all
of
its assets to, any other person or entity;
(i) Indictment;
Proceedings.
The
indictment or threatened indictment of the Company or any of its subsidiaries
or
any executive officer of the Company or any of its subsidiaries under any
criminal statute, or commencement or threatened commencement of criminal or
civil proceeding against the Company or any of its subsidiaries or any executive
officer of the Company or any of its subsidiaries pursuant to which statute
or
proceeding penalties or remedies sought or available include forfeiture of
any
of the property of the Company or any of its subsidiaries;
3.2 Default
Interest.
Following the occurrence and during the continuance of an Event of Default,
the
Company shall pay additional interest on the outstanding principal balance
of
this Note in an amount equal to two percent (2%) per month, and all outstanding
obligations under this Note, including unpaid interest, shall continue to accrue
interest at such additional interest rate from the date of such Event of Default
until the date such Event of Default is cured or waived.
ARTICLE
IV
MISCELLANEOUS
4.1 Issuance
of New Note.
Upon
any partial redemption of this Note, a new Note containing the same date and
provisions of this Note shall, at the request of the Holder, be issued by the
Company to the Holder for the principal balance of this Note and interest which
shall not have been paid as of such date. Subject to the provisions of Article
III of this Note, the Company shall not pay any costs, fees or any other
consideration to the Holder for the production and issuance of a new
Note.
4.2 Cumulative
Remedies.
The
remedies under this Note shall be cumulative.
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4.3 Failure
or Indulgence Not Waiver.
No
failure or delay on the part of the Holder hereof in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing hereunder are cumulative to, and not exclusive
of,
any rights or remedies otherwise available.
4.4 Notices.
Any
notice herein required or permitted to be given shall be in writing and shall
be
deemed effectively given: (a) upon personal delivery to the party notified,
(b)
when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, (c) five (5) days
after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification
of
receipt. Any notice given hereunder shall be to the following:
To
The
Company:
00
Xxxxxxxx Xxxx.
Xxx
Hills, NY 11746
To
The
Holder:
Solar
Thin Power, Inc.
00
Xxxxxxxx Xxxx.
Xxx
Hills, NY 11746
4.5 Amendment
Provision.
The
term “Note” and all references thereto, as used throughout this instrument,
shall mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented, and any successor instrument
as such successor instrument may be amended or supplemented.
4.6 Assignability.
This
Note shall be binding upon the Company and its successors and assigns, and
shall
inure to the benefit of the Holder and its successors and assigns. The Company
may not assign any of its obligations under this Note without the prior written
consent of the Holder, any such purported assignment without such consent being
null and void.
4.7 Cost
of Collection.
In case
of any Event of Default under this Note, the Company shall pay the Holder the
Holder’s reasonable costs of collection, including reasonable attorneys’
fees.
4.8 Governing
Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS
NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
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(b) THE
COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND,
AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER
RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE
OR
ANY OF THE RELATED AGREEMENTS; PROVIDED,
THAT
THE COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD
BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
FURTHER PROVIDED,
THAT
NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT
THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
HOLDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS.
THE
COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL
ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT
AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
(c) THE
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY HERETO WAIVES ALL RIGHTS
TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER AND/OR THE
COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.
4.9 Severability.
In the
event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Note.
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4.10 Maximum
Payments.
Nothing
contained herein shall be deemed to establish or require the payment of a rate
of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum rate permitted by such law, any payments in excess
of such maximum rate shall be credited against amounts owed by the Company
to
the Holder and thus refunded to the Company.
4.11 Security
Interest.
The
Holder has been granted a security interest (a) in certain proceeds of certain
equity interests of the Company as more fully described in the Security
Agreement
[Signatures
appear on the following page.]
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IN
WITNESS WHEREOF,
the
Company has caused this Secured Term Note to be signed in its name effective
as
of this 1 day of February, 2008.
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By:
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/s/
Xxxxx Xxxxx
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Name:
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Title:
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WITNESS:
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