PROMISSORY NOTE
AND PLEDGE AGREEMENT
$950,000.00
August 4, 0000
Xxx Xxxx, Xxx Xxxx
Xxxxx X. Xxxxx ("Maker") promises to pay on August 4, 2001 (the
"Maturity Date"), to the order of ALLIANCE National Incorporated at 00 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ("Payee"), the principal amount of
NINE HUNDRED FIFTY THOUSAND DOLLARS ($950,000.00).
This Note shall accrue interest on the principal amount hereof at a
rate of 5.48% per annum, calculated on the basis of a 365 day year. Maker shall
pay accrued interest annually on August 4 of each year and on the Maturity Date.
This Note may be prepaid in whole or in part without premium or
penalty at any time and from time to time at the option of the Maker. Any
prepayments shall be applied first to accrued and unpaid interest, and then to
outstanding principal.
The rights, duties and obligations of (a) Maker under this Note may
not be assigned without the prior consent of Payee and (b) Payee under this Note
may be assigned without the prior consent of Maker.
In order to secure (i) the due and punctual payment of all monetary
obligations hereunder of Maker to Payee and any reasonable costs and expenses
(including, but not limited to, all legal fees and expenses) of collection or
enforcement of any such obligations and (ii) the due and punctual payment of any
costs and expenses incurred in connection with the realization of the security
for which this Note provides and any reasonable costs and expenses (including,
but not limited to, all legal fees and expenses) incurred in connection with any
proceedings to which this Note may give rise (collectively referred to herein as
"Liabilities"), Maker hereby transfers, assigns, grants, bestows, sells, conveys
and pledges to Payee a first security interest in the Collateral (as herein
defined), which security interest shall remain in full force and effect until
all of the Liabilities shall have been paid in full to Payee.
For purposes of this Note, "Collateral" shall mean all of Maker's
right, title and interest in and to 200,000 shares of Series B Convertible
Preferred Stock, par value $.01 per share, represented by stock certificate
number PB-041, that Maker owns in Payee; and all proceeds and products thereof
(as the foregoing terms are defined in the Uniform Commercial Code as in effect
in the State of New York). Concurrently with the Maker's execution and delivery
of this Note, Maker has (a) duly executed in blank a stock power required by the
pledge of the Collateral hereunder; (b) delivered the stock certificate
representing the Collateral to Payee to be held by Payee pending the payment in
full of this Note; and (c) irrevocably appointed Payee as Maker's
attorney-
1
in-fact to complete the stock power to realize upon the Collateral upon
nonpayment of principal or interest under this Note, with such appointment being
coupled with an interest.
Except as contemplated by this Note, Maker shall not encumber or
grant a security interest in any of the Collateral, without the prior written
consent of Payee, and Maker hereby represents that he has not done so heretofore
and, other than the grant of the security interest contemplated hereby, the
Collateral pledged by him hereunder is, and will be, owned by him free and clear
of all liens and encumbrances.
This Note shall be governed by, and construed in accordance with the
internal laws of the State of New York without giving effect to the conflict of
laws provisions thereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note and
Pledge Agreement as of the date first above written.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
