Unassociated Document


    PROMISSORY
      NOTE

     

     

    
      	$36,500.00	New York, New York
	July 1, 2002	 


    

     

     

     

    FOR
      VALUE RECEIVED,
      Robert
      S. Ehrlich (“Maker”) hereby promises to pay to the order of Electric Fuel
      Corporation (“EFC”), at 632 Broadway, New York, New York, or at such other place
      as may be designated in writing by EFC or any subsequent holder of this Note
      (“Holder”), the principal sum of Thirty-Six Thousand Five Hundred Dollars
      ($36,500.00), on July 1, 2012, together with simple interest from the date
      hereof on the principal amount from time to time unpaid at a per annum rate
      equal to the lesser of (i) 5.75%, and (ii) 1% over the then-current Federal
      Fund
      Rate, until the principal sum is paid in full. Interest will accrue on the
      loan
      until maturity.

     

    All
      payments hereunder shall be made in United States Dollars only. Maker may prepay
      this Note at any time and from time to time without premium or
      penalty.

     

    Maker
      will bear no personal liability on the principal and accrued interest of this
      Note.

     

    In
      the
      event that the Maker files or has filed against the Maker any petition under
      any
      bankruptcy or insolvency law or for the appointment of a receiver or makes
      a
      general assignment for the benefit of creditors, then the entire unpaid
      principal of this note, together with accrued interest thereon, shall
      automatically become immediately due and payable. No failure by the holder
      to
      take action with respect to any default hereunder shall affect its subsequent
      rights to take action with respect to the same or any other default. In the
      event of default the Maker agrees to pay all reasonable costs of collection,
      including reasonable attorneys’ fees, to the extent allowed by law.

     

    This
      Note
      shall be secured by a pledge to EFC of 50,000 shares (the “Pledged Shares”) of
      EFC’s common stock, $0.01 par value, acquired with this note.

     

    The
      recourse under this note shall only be to the Pledged Shares. EFC shall have
      all
      rights of a secured party under the Uniform Commercial Code as in effect in
      the
      State of New York, including without limitation all remedies available
      thereunder to a secured party in the event of a default in the performance
      of
      the obligation secured, with respect to the Pledged Shares, and Maker will
      take
      all actions reasonably requested by EFC to perfect such security interest,
      including without limitation delivering to EFC the stock certificate or
      certificates representing the Pledged Shares, together with stock powers duly
      endorsed in blank. EFC shall release its security interest in the Pledged Shares
      when all principal and interest owed hereunder have been paid in full.
      Notwithstanding the foregoing, EFC shall sell Pledged Shares per Maker’s
      instructions from time to time, provided that with respect to any and each
      such
      sale EFC may withhold from the proceeds of such sale that percentage of the
      original principal and accrued but unpaid interest under this Note as the
      Pledges Shares sold shall bear to the original 50,000 Pledged Shares (so that
      if, for example, Maker instructs EFC to sell 14,000 Pledged Shares, EFC shall
      be
      entitled to withhold from the proceeds of such sale 28% of the original
      principal amount and accrued but unpaid interest under this Note).

     

    The
      Maker
      hereby waives presentment, demand, notice of nonpayment, protest and all other
      demands, notices and defenses (other than payment) in connection with the
      delivery, acceptance, performance and enforcement of this note.

     

    This
      Note
      shall be deemed to have been made under and shall in all respects be governed
      by
      the internal laws of the State of New York without reference to conflicts of
      laws. Maker consents to the exclusive jurisdiction of the courts in New York,
      New York with respect to any and all suits brought in connection with this
      Agreement, and waives any right to object to the personal or subject matter
      jurisdiction of such court and waives any right to move dismissal based on
      grounds of forum
      non conveniens.

     

    IN
      WITNESS WHEREOF,
      the
      undersigned has duly executed and delivered this Note as of the 1st
      day of
      July, 2002.

     

    


     

     

    Robert
      S. Ehrlich

    


    

                                                                        
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