Exhibit 10.70
PROMISSORY NOTE
$485,883.00 Belmont, MA
March 31, 2004 Due: December 31, 2006
For value received, the undersigned, Kronos Advanced Technologies,
Inc., a Nevada corporation, (the "Company") and Kronos Air Technologies, Inc.
("Kronos Air"), a Nevada corporation, (the Company and Kronos Air Technologies,
Inc. are hereinafter referred to jointly as "Borrowers") jointly and severally
promise to pay to the order of Richard F. Tusing (hereinafter, "Lender") at
Lender's offices located at 464 Common Street, Suite 301, Belmont, MA 02478 or
at such other place as the holder of this Promissory Note may from time to time
designate the principal sum of four hundred eight-five thousand eight hundred
and eighty-three dollars ($485,883.00), together with interest thereon at the
rate hereinafter specified, and any and all other sums which may be due and
owing to the holder of this Promissory Note in accordance with the following
terms:
1. Repayment. Commencing April 1, 2004 and provided that the
Borrowers have a combined minimum cash balance of two hundred thousand dollars
($200,000), the Borrowers shall repay the lender the last day of each month in
cash eight thousand nine hundred and eight-nine dollars ($8,989). In the event
that the Borrowers' combined cash balance is less than $200,000, then the $8,989
would be deferred to the next month and added to the payment for the next month
subject to the same minimum cash requirements. Commencing upon the earliest of
the following the Borrowers shall repay the Lender in full in cash for the
outstanding principal and accrued and unpaid interest:
a) In the event of a "Change of Control." For purposes of this Note,
a "Change in Control" shall have the same meaning as set forth in
the Employment Agreement between Lender and the Company;
b) In the event of an "Event of Default" (as defined below);
c) In the event that the Borrowers secure cumulative debt or equity
financing from a source other than Fusion Capital in the amount of
$5,000,000 or more; in the event that the Borrowers secure
cumulative debt or equity financing from a source other than
Fusion Capital between $1,000,000 and $5,000,000, then an amount
equal to nine percent (9%) of the net proceeds not to exceed the
total amount owed under this Promissory Note would be additionally
due and owing under this Promissory Note;
d) In the event the Lender is no longer employed by the Borrowers,
this Promissory Note is payable as follows:
i. if the Lender's employment is terminated by the Borrowers for
"Cause" as defined in the Lender's Employment Agreement with the
Company, this Promissory Note will be due and payable in twelve
(12) equal monthly installments commencing thirty (30) days after
the date of termination;
ii. if the Lender's employment with the Borrowers is terminated for
any reason other than "Cause" as defined in the Lender's
Employment Agreement with the Borrowers, then this Promissory Note
will be due and payable in six (6) equal monthly installments
commencing thirty (30) days after the date of termination;
e) In no event shall the outstanding principal and all accrued
interest due under this Promissory Note be repaid to the Lender
later than December 31, 2006.
2. Interest Rate. Interest shall accrue at a rate of one percent
(1%) per month simple interest.
3. Calculation of Interest. Interest on this Note shall be calculated
on the basis of a thirty (30) day per month factor applied to the actual days on
which there exists an unpaid principal balance due under this Promissory Note.
4. Application of Payments. All payments made hereunder shall be
applied first to late penalties or other sums owing the holder, then to accrued
interest, and last to repayment of the principal amount of this Promissory Note.
5. Prepayment. Borrowers may prepay this Promissory Note in whole or in
part at any time or from time to time without penalty or additional interest,
provided that payments are applied as provided in Section 4 above.
6. Default and Remedies. Any failure to make any payment due under this
Promissory Note when due or upon the failure to comply with any other terms and
provisions of this Promissory Note which is not cured within thirty (30) days
after receipt of written notice from the Lender shall be an event of default
under this Promissory Note (an "Event of Default") and shall entitle Lender to
all of the rights and remedies specified herein or otherwise available under
applicable law, without any further notice, any further right to cure, or
obligation to make demand for payment. Upon an Event of Default, the entire
unpaid principal balance of this Promissory Note, together with all accrued but
unpaid interest and other sums due hereunder, shall immediately become due and
payable in full, in cash, and Lender shall have the right to bring suit for such
amount and to exercise any other remedies available.
7. Attorney's Fees. The prevailing party in any litigation shall be
entitled to recover all costs and expenses (including court costs and reasonable
attorneys' fees).
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8. Extensions or Modifications. All parties to this Promissory Note,
whether maker, endorsor or guarantor, agree that the maturity of this Promissory
Note or any payment due hereunder may be extended at any time or from time to
time, this Promissory Note may be modified, and any Event of Default hereunder
may be waived without releasing, discharging or affecting the liability of
Borrowers or any other party not specifically released.
9. Venue. Borrowers agree that venue shall be proper in any state court
in the State of Virginia in any action or proceeding brought to construe,
interpret or enforce this Promissory Note or any related document. Borrowers
waive the benefit of any and every statute, ordinance or rule of court which may
be lawfully waived conferring upon Borrowers any right or privilege, stay of
execution, or supplementary proceeding or other relief from the immediate
enforcement of a judgment or related proceedings on a judgment. The Borrowers
waive the benefit of any exemption laws. The authority granted herein shall not
be exhausted by any one or more exercises or be extinguished by any judgment
entered, and may be exercised on one or more occasions and in one or more
jurisdictions.
10. Waiver of Defenses; Setoff. The Borrowers agree that neither the
Lender nor any subsequent holder of this Promissory Note shall be subject to any
claims, defenses or setoffs which Borrowers may have against the Lender or any
prior holder, all of which are waived as to the Lender and any subsequent
holders, and all subsequent holders shall have the rights of a holder in due
course with respect to Borrowers even though the subsequent holder might not
qualify under applicable law absent this paragraph as a holder in due course.
11. Waiver of Protest. Borrowers and all parties to this Promissory
Note hereby waive presentment, protest and demand and notice of protest, demand,
dishonor and nonpayment of this Promissory Note.
12. Commercial Loan Transaction. Borrowers warrant and agree that this
Promissory Note is the result of a commercial loan transaction.
13. No Waiver. The delay or failure of any holder to exercise its
rights hereunder shall not be deemed a waiver thereof. No waiver of any rights
of holder shall be effective unless in writing and signed by the holder, and any
waiver of any right shall not apply to any other right or to such right in any
subsequent event or circumstance not specifically included in such waiver.
14. Notices. Any notices required hereunder shall be deemed properly
given if delivered in person or if mailed by registered or certified mail,
postage prepaid, return receipt requested to the parties at the following
addresses:
15. Headings. The section and subsection headings in this Promissory
Note are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Promissory Note.
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If to Kronos Advanced Technologies, Inc. or Kronos Air Technologies, Inc. to:
Mr. Daniel R.
Dwight Kronos Advanced Technologies, Inc
464 Common Street, Suite 301
Belmont, MA 02478
with a copy to:
Clayton E. Parker, Esq.
Kirkpatrick & Lockhart LLP
201 South Biscayne Boulevard, Suite 2000
Miami, Florida 33131
If to Lender:
Mr. Richard F. Tusing
Kronos Advanced Technologies, Inc.
464 Common Street, Suite 301
Belmont, MA 02478
or to such other address as any party may hereafter give notice of to the other.
16. Choice of Law. This Promissory Note shall be deemed to be made in
the State of Virginia and shall be governed, construed and enforced in strict
accordance with the laws of the State of Virginia, without reference to
principles of conflict of laws.
SIGNATURES ON THE FOLLOWING PAGE
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IN WITNESS WHEREOF, Borrowers have caused this Promissory Note to be executed on
their behalf by their respective duly authorized officers and their respective
corporate seals to be affixed and attested by their respective Secretaries as of
the day and year first above written.
ATTEST: KRONOS ADVANCED TECHNOLOGIES, INC.
By: [SEAL]
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Secretary Name: Daniel R. Dwight
Title: President and CEO
ATTEST: KRONOS AIR TECHNOLOGIES, INC.
By: [SEAL]
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Secretary Name: Daniel R. Dwight
Title: President and CEO
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