EXHIBIT 99.10
SECURED PROMISSORY NOTE
$925,000.00 October 25, 2004
R E C I T A L S:
A. The undersigned previously executed a Secured Promissory Note in the
principal amount of $1,000,000.00, dated May 9, 2003 (the "Original $1.0 Million
Note"), in favor of FKA Distributing Co, d/b/a HoMedics, inc., a Michigan
corporation ("Lender").
B. No funds were loaned by Lender under the Original $1.0 Million Note.
C. This Secured Promissory Note ("Note") replaces the Original $1.0 Million Note
and upon the execution of this Note by the undersigned, Lender will destroy the
Original $1.0 Million Note.
NOW, THEREFORE, from the date of this Note, the terms of repayment are as
follows:
FOR VALUE RECEIVED, the undersigned, Kronos Advanced Technologies, Inc., a
Nevada corporation ("Kronos") and Kronos Air Technologies, Inc., a Nevada
corporation, promise to pay to the order of Lender, at the office of the Lender
in the State of Michigan, Nine Hundred Twenty Five Thousand and 00/100
($925,000.00) Dollars (U.S.) (or that portion of it advanced by Lender pursuant
to the terms of that certain First Amendment to Master Loan and Investment
Agreement of even date herewith among the parties ("Master Loan Agreement")).
Interest on the unpaid principal balance from the date such principal is
outstanding this Note shall accrue at the rate of 6% per annum until maturity,
whether by acceleration or otherwise, or until Default, as later defined, and
after that at a default rate equal to the rate of interest otherwise prevailing
under this Note plus 3% per annum (but in no event in excess of the maximum rate
permitted by law). Interest shall be calculated for the actual number of days
the principal received by Kronos is outstanding on the basis of a 365/366 day
year. No payments shall be required under this Note until the earlier of: (i)
the quarter following the Production Effective Date (as such term is defined in
the Exclusive License Agreement dated October 23, 2002 between Lender and
Kronos, as amended); or (ii) twenty-four (24) months from the date of this Note
(the "Repayment Start Date"). Interest accrued during such period shall, on the
Repayment Start Date, become part of the principal balance under this Note and
be included as principal for purposes of calculating amortization. Payment
installments of principal and accrued interest due under this Note shall begin
on the first day of the quarter following the Repayment Start Date and continue
on the first day of each November, February, May and August until paid in full
over the remaining period of this Note. The entire remaining unpaid balance of
principal and accrued interest shall be payable on the fifth (5th) anniversary
of this Note. A late installment charge equal to 5% of each late installment may
be charged on any installment payment not received by the Lender within 10
calendar days after the installment due date, but acceptance of payment of this
charge shall not waive any Default under this Note.
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This Note and any other indebtedness and liabilities of any kind of the
undersigned to the Lender, and any and all modifications, renewals or extensions
of it, whether joint or several, contingent or absolute, now existing or later
arising, and however evidenced (collectively "Indebtedness") are secured by and
the Lender is granted a security interest in all property of the undersigned
from time to time in the possession of the Lender and by any other collateral,
rights and properties described in each and every mortgage, security agreement,
pledge, assignment and other security or collateral agreement which has been, or
will at any time(s) later be, executed by the undersigned to or for the benefit
of the Lender (collectively "Collateral").
If the undersigned (a) fail to pay this Note or any of the Indebtedness when due
(after the expiration of the 30 day grace period as set forth in the Master Loan
Agreement), by maturity, acceleration or otherwise; or (b) fail to comply (after
the expiration of the 30 day grace period as set forth in the Master Loan
Agreement) with any of the terms or provisions of any agreement between the
undersigned and the Lender; or (c) become the subject of a voluntary or
involuntary proceeding in bankruptcy, or a reorganization, arrangement or
creditor composition proceeding, ceases doing business as a going concern,
dissolves or, is the subject of a dissolution, merger or consolidation; or (d)
if any warranty or representation made by the undersigned in connection with
this Note or any of the Indebtedness shall be discovered to be false or
misleading in any material respect; (e) or if there is any termination, notice
of termination, or breach of any guaranty, pledge, collateral assignment or
subordination agreement relating to all or any part of the Indebtedness; or (f)
if there is any failure by the undersigned to pay when due (after the expiration
of the 30 day grace period as set forth in the Master Loan Agreement) any of its
indebtedness (other than to the Lender) in excess of $25,000 or in the
observance or performance of any term, covenant or condition in any document
evidencing, securing or relating to such indebtedness; or (g) if there is filed
or issued a levy or writ of attachment or garnishment or other like judicial
process upon the undersigned or any of the Collateral, then the Lender, upon the
occurrence of any of these events (each a "Default"), may at its option declare
any or all of the Indebtedness to be immediately due and payable, sell or
liquidate all or any portion of the Collateral, set off against the Indebtedness
any amounts owing by the Lender to the undersigned, charge interest at the
default rate provided in the document evidencing the relevant Indebtedness and
exercise any one or more of the rights and remedies granted to the Lender by any
agreement with the undersigned or given to it under applicable law. All payments
under this Note shall be in immediately available United States funds, without
setoff or counterclaim.
This Note shall bind the undersigned, its successors and assigns.
The undersigned waive presentment, demand, protest, notice of dishonor, notice
of demand or intent to demand, notice of acceleration or intent to accelerate,
and all other notices, and agree that no extension or indulgence to the
undersigned or release shall affect the obligations of any of the undersigned.
The undersigned agree to reimburse the holder or owner of this Note for any and
all costs and expenses (including without limit, court costs, legal expenses and
reasonable attorney fees, whether inside or outside counsel is used, whether or
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not suit is instituted and, if suit is instituted, whether at the trial court
level, appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in collecting or attempting to collect this Note or incurred
in any other matter or proceeding relating to this Note.
The undersigned acknowledge and agree that there are no contrary agreements,
oral or written, establishing a term of this Note and agrees that the terms and
conditions of this Note may not be amended, waived or modified except in a
writing signed by an officer of the Lender expressly stating that the writing
constitutes an amendment, waiver or modification of the terms of this Note. As
used in this Note, the word "undersigned" means each maker signing this Note. If
any provision of this Note is unenforceable in whole or part for any reason, the
remaining provisions shall continue to be effective. THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
THE UNDERSIGNED AND THE LENDER ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS.
KRONOS ADVANCED TECHNOLOGIES, INC.,
a Nevada corporation
By:______________________________________
Name:____________________________________
Its:_____________________________________
KRONOS AIR TECHNOLOGIES, INC.,
a Nevada corporation
By:______________________________________
Name:____________________________________
Its:_____________________________________
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