EXHIBIT 10.08
PROMISSORY NOTE
NOTICE: CONTAINS A WAIVER OF TRIAL BY JURY
$750,000.00 Date: September 14, 2001
1. Principal. FOR VALUE RECEIVED, the undersigned, ENVIRONMENTAL POWER
CORPORATION, a Delaware ("Maker") promises to pay to ALCO FINANCIAL SERVICES,
LLC ("Payee"), or order, at its office at 900 Larkspur Landing Circle, Suite
230, Larkspur, CA 94939, the principal amount set forth above on September 13,
2002, plus interest payable as set forth below. Capitalized terms not defined
herein have the meanings ascribed to them in the security agreement of even date
herewith made by Maker in favor of Payee (the "Security Agreement").
2. Interest. Interest hereunder shall be due and payable monthly, payable with
each installment of principal due hereunder, and continuing on the first day of
each month thereafter until the entire principal sum hereof and all interest
accrued hereunder are paid in full. Interest hereunder shall be computed (on the
basis of a 360-day year and actual days elapsed) on the outstanding principal
balance owing hereunder at the prime rate as reported in the Wall Street Journal
(Western Addition) (the "Prime Rate") plus three and one-half percent (3.5%)
(the "Interest Rate"). If the Prime Rate is reported as a range, the highest
reported rate shall be used in determining the Interest Rate.
3. Application of Payments. Each payment received hereunder shall, at the
Payee's option, be applied first to interest and all sums due hereunder other
than principal, with the remainder, if any, to principal.
4. Event of Default. Each of the following events or conditions shall constitute
an "Event of Default":
4.1. Borrower fails to make any payment hereunder when due, whether at
maturity, upon acceleration, or otherwise, which default is not cured within
five (5) business days;
4.2. Borrower is in default with respect to the Security Agreement, which
default is not cured within five (5) business days;
4.3. An order for relief is entered against Maker by any United States
Bankruptcy Court; or Maker does not generally pay its debts as they become due
(within the meaning of 11 U.S.C. 303(h) as at any time amended, or any successor
statute thereto); or Maker makes an assignment for the benefit of creditors; or
Maker applies for or consents to the appointment of a custodian, receiver,
trustee, or similar officer for it or for all or any substantial part of its
assets, or such custodian, receiver, trustee, or similar officer is appointed
without the application or consent of Maker; or Maker institutes (by petition,
application, answer, consent, or otherwise) any bankruptcy, insolvency,
reorganization, moratorium, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or any such proceeding shall be instituted (by petition,
application, or otherwise) against Maker; or any judgment, writ, warrant of
attachment, execution, or similar process shall be issued or levied
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against a substantial portion of the property of Maker;
4.4. An adverse change occurs with respect to the financial condition or
operations of Maker which results in a material impairment of the prospect of
repayment of this Note;
4.5. A sale, hypothecation or other disposition by the Maker is made of
twenty (20%) percent or more of the beneficial interest in any class of voting
stock of Maker;
4.6. Any material provision of this Note or the Security Agreement ceases,
for any reason, to be valid and binding on Maker.
5. Remedies.
5.1. Upon the occurrence of any Event of Default at Payee's option:
5.2. Payee may declare this Note terminated;
5.3. Lender may declare all principal and interest due hereunder to be
immediately due and payable, without presentment, demand, protest, or notice of
any kind, all of which are hereby expressly waived by Maker.
5.4. all amounts due shall accrue interest at the Interest Rate plus ten
percent (10%); and
5.5. Lender may, immediately and without expiration of any period of
grace, enforce payment of all Obligations and exercise any and all other
remedies granted to it under the Security Agreement, at law, in equity, or
otherwise.
6. Security Interest. The obligations evidenced hereby are secured by all
personal property collateral now or hereafter granted by Maker to Payee,
including but not limited to collateral described in the Security Agreement.
7. Prepayment Penalty. With each prepayment of any portion of this Note, whether
in whole or in part, Maker shall pay Payee a prepayment penalty of $7,500.00.
8. Attorneys Fees. Maker agrees to reimburse Payee on demand for:
8.1. the actual amount of all costs and expenses, including reasonable
attorneys' fees, which Payee has incurred or may incur in:
8.1.1. negotiating, preparing, or administering this Note and any
documents prepared in connection herewith, all of which shall be paid out of the
principal advanced with the execution hereof;
8.1.2. any way arising out of this Note; and
8.1.3. protecting, preserving or enforcing any lien, security
interest, or other right granted by Maker to Payee or arising under applicable
law, whether or not suit is brought, including but not limited to the defense of
any claim that any payment received by Maker from or for the
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account of an Account Debtor is avoidable under the Bankruptcy Code or any other
debtor relief statute.
8.2. the actual costs, including photocopying (which, if performed by
Payee's employees, shall be at the rate of $.10/page), travel, and reasonable
attorneys' fees and expenses incurred in complying with any subpoena or other
legal process attendant to any litigation in which Maker is a party.
9. Choice of Law. This Note and all transactions contemplated hereunder and/or
evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the State of California.
10. Jury Trial Waiver. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY
RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (a) ARISING HEREUNDER, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11. Venue; Jurisdiction. The parties agree that any suit, action or proceeding
arising out of the subject matter hereof, or the interpretation, performance or
breach of this Agreement, shall, if Payee so elects, be instituted in any court
sitting in San Francisco, California (the "Acceptable Forums"). Maker agrees
that the Acceptable Forums are convenient to it, and irrevocably submits to the
jurisdiction of the Acceptable Forums, irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement, and waives any and
all objections to jurisdiction or venue that it may have under the laws of the
State of California or otherwise in those courts in any such suit, action or
proceeding. Should such proceeding be initiated in any
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other forum, Maker waives any right to oppose any motion or application made by
Payee as a consequence of such proceeding having been commenced in a forum other
than an Acceptable Forum.
ENVIRONMENTAL POWER CORPORATION
By: /s/ Joseph E. Cresci
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Name: Joseph E. Cresci
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Title: CEO
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