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ex108.htm - Generated by SEC Publisher for SEC Filing

10.8     Form of Stock Option Agreement dated as of December 16, 2009 between New Energy Technologies, Inc. and its         non-employee directors.

 

NONSTATUTORY STOCK OPTION AGREEMENT

 

            THIS NONSTATUTORY STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of December 15, 2009, by and between New Energy Technologies, Inc. a Nevada corporation (the “Company”), and  Alastair K. Livesey (“Optionee”):

 

            In consideration of the covenants herein set forth, the parties hereto agree as follows:

 

                        (a)  Date of Grant Authorized:                         December 15, 2009

                        (b)  Effective Date of Option                           December 16, 2008

                        (c)  Number of Shares:                                    50,000

                        (d)  Exercise Price:                                           $0.44

 

            2.  Acknowledgements.

 

            (a)  Optionee is a director of the Company.

 

            (b)  The Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors) have this day approved the granting of this Option subject to the execution of this Agreement; and

 

            (c)  The Board has authorized the granting to Optionee of a nonstatutory stock option (“Option”) to purchase shares of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”).

 

            3.  Shares; Price.  The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set forth in Section 1(c) above (the “Shares”) for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the “Exercise Price”), such price being not less than [e.g., 100%] of the closing price of the Shares covered by this Option on December 15, 2009.

 

            4.  Term of Option; Continuation of Service.  Subject to the early termination provisions set forth herein, this Option shall expire, and all rights hereunder to purchase the Shares shall terminate five (5) years from the date hereof. Nothing contained herein shall be construed to interfere in any way with the right of the Company or its shareholders to remove or not elect Optionee as an officer of the Company, or to increase or decrease the compensation of Directors from the rate in effect at the date hereof.

 

            5.  Vesting and Exercisability of Option.  Subject to the provisions of Sections 7 and 8 hereof, this Option shall vest as follows:

 

            (a)        As to 20,000 shares, at any time from December 16, 2009 through December 15, 2014;

            (b)        As to 15,000 shares, at any time from December 16, 2010 through December 15, 2014; and

            (c)        As to 15,000 shares, at any time from December 16, 2011 through December 15, 2014.

 

            6.  Manner of Exercise.  This Option shall be exercised by delivery to the Company of (a) written  

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notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) a written investment representation as provided for in Section 13 hereof. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifetime.

 

            7.  Termination of Service.  If Optionee shall cease to serve as an officer, director or employee of, or a consultant to the Company (a “Company Relationship”) for any reason (other than death, in which case the provisions of Section 8 hereof shall govern) the Optionee shall have the right at any time within 90 days following the date Optionee ceases to have a Company Relationship, to exercise this Option to the extent vested and purchase Shares, to the extent, but only to the extent, that Optionee could have exercised this Option as of the date Optionee ceases to have any Company Relationship; following the expiration of the aforesaid 90 day exercise period, this Agreement shall terminate in its entirety and be of no further force or effect and the Option may no longer be exercised.  Anything herein to the contrary notwithstanding the termination of one form of Company Relationship shall not terminate this Agreement if the Optionee continues to maintain any other form of Company Relationship.

 

            8.  Death of Optionee.  If the Optionee shall die while having a Company Relationship, Optionee’s personal representative or the person entitled to Optionee’s rights hereunder may at any time within 180 following the date of Optionee’s death, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; following the expiration of the aforesaid 180 day exercise period, this Agreement shall terminate in its entirety and be of no further force or effect and the Option may no longer be exercised.

 

            9.  No Rights as Shareholder.  Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance of the Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 7 hereof.

 

            10.  Recapitalization.  Subject to any required action by the shareholders of the Company, the number of Shares covered by this Option, and the Exercise Price thereof, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company; provided however that the conversion of any convertible securities of the Company shall not be deemed having been “effected without receipt of consideration by the Company”.

 

            In the event of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”), this Option shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, if Optionee shall have a Company Relationship at the time such Reorganization is approved by the stockholders, Optionee shall have the right to exercise this Option to the extent vested, for a period beginning 30 days prior to the consummation of such Reorganization and ending as of the Reorganization or the expiration of this Option, whichever is earlier, subject to the consummation of the Reorganization. In any event, the Company shall notify Optionee, at least 30 days prior to the consummation of such Reorganization, of his exercise rights, if any, and that the Option shall terminate upon the consummation of the Reorganization.

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            Subject to any required action by the shareholders of the Company, if the Company shall be the surviving entity in any merger or consolidation, this Option thereafter shall pertain to and apply to the securities to which a holder of Shares equal to the Shares subject to this Option would have been entitled by reason of such merger or consolidation, and the installment provisions of Section 5 shall continue to apply.

 

            In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all of its authorized Stock without par value into the same number of shares of Stock with a par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of this Option.

 

            To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as hereinbefore expressly provided, Optionee shall have no rights by reason of any subdivision or consolidation of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number and price of Shares subject to this Option shall not be affected by, and no adjustments shall be made by reason of, any dissolution, liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or securities convertible into shares of stock of any class.

 

            The grant of this Option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve or liquidate or to sell or transfer all or any part of its business or assets.

 

            11.  Taxation upon Exercise of Option.  Optionee understands that, upon exercise of this Option, Optionee will recognize income, for Federal and state income tax purposes, in an amount equal to the amount by which the fair market value of the Shares, determined as of the date of exercise, exceeds the Exercise Price. The acceptance of the Shares by Optionee shall constitute an agreement by Optionee to report such income in accordance with then applicable law and to cooperate with Company in establishing the amount of such income and corresponding deduction to the Company for its income tax purposes. Withholding for federal or state income and employment tax purposes will be made, if and as required by law, from Optionee’s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require Optionee to make a cash payment to cover such liability as a condition of the exercise of this Option.

 

            12.  Modification, Extension and Renewal of Options.  The Board or Committee, may modify, extend or renew this Option or accept the surrender thereof (to the extent not theretofore exercised) and authorize the granting of a new option in substitution therefore (to the extent not theretofore exercised), subject at all times to the Code and applicable securities laws. Notwithstanding the foregoing provisions of this Section 12, no modification shall, without the consent of the Optionee, alter to the Optionee’s detriment or impair any rights of Optionee hereunder.

 

            13.  Investment Intent; Restrictions on Transfer.

 

            (a)  Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; and that upon such exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this Option under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and 

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substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the foregoing investment representation and agreement and shall not be required to furnish the Company with the foregoing written statement.

 

            (b)  Optionee further represents that Optionee has had access to the financial statements or books and records of the Company, has had the opportunity to ask questions of the Company concerning its business, operations and financial condition, and to obtain additional information reasonably necessary to verify the accuracy of such information.

 

            (c)  Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock dividend or other similar capital event shall bear legends in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE ‘SECURITIES ACT’) OR UNDER THE APPLICABLE OR SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED DECEMBER 15, 2009 BETWEEN THE COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

 

 

and/or such other legend or legends as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company’s transfer agent.

 

            14.  Stand‐off Agreement.  Optionee agrees that, in connection with any registration of the Company’s securities under the Securities Act, and upon the request of the Company or any underwriter managing an underwritten offering of the Company’s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any of the Shares (other than Shares included in the offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a period of up to one year following the effective date of registration of such offering.

 

            15.  Restriction Upon Transfer.  This Option is not transferable by the Optionee, except as contemplated by Section 8 hereof.

 

            16.  Notices.  Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5) days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided by Optionee for use in Company records related to Optionee.

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            17.  Agreement Subject to Plan; Applicable Law.  This Option is made pursuant to the Plan and shall be interpreted to comply therewith. A copy of such Plan is available to Optionee, at no charge, at the principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the State of Nevada, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein. The Optionee acknowledges that the Plan has not been approved by the Company’s stockholders, as of the date hereof.

 

 

 

 

[SIGNATURES APPEAR ON NEXT PAGE]

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            IN WITNESS WHEREOF, the parties hereto have executed this Option as of the date first above written.

 

New Energy Technologies, Inc.

 

 

By:______________________________ 

Meetesh Patel, President and Chief Executive Officer

                                                                        

 

                                                                        

____________________________________

Alastair K. Livesey, Optionee

 

 

(One of the following, as appropriate, shall be signed):

 

 

I certify that as of the date                               By his or her signature, the

hereof I am unmarried                                     spouse of Optionee hereby agrees

                                                                        to be bound by the provisions of

                                                                        the foregoing NONSTATUTORY STOCK

                                                                        OPTION AGREEMENT

 

____________________________                /s/___________________________________

Optionee                                                         Spouse of Optionee

 

 

 

 

 

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Appendix A

 

NOTICE OF EXERCISE

(Stock Option)

 

To:      NEW ENERGY Technologies, Inc.

 

            The undersigned hereby elects to purchase ______________ Shares of the Company pursuant to the terms of the Sock Option Agreement Dated December 15, 2009 between the undersigned and New Energy Technologies, Inc and herewith tender  $_______________________ in payment of the exercise price in full, together with all applicable transfer taxes, if any by:

 

            (a) Check (subject to collection); or

            (b) Wire transfer in accordance with wiring instructions provided by the Company.

 

            Please issue a certificate or certificates representing said Shares in the name of the undersigned as is specified below and forward the same to the address set forth below.

 

 

__________________________________

Signature of Optionee 

 

Print Name of Optionee: _______________________________________

 

 

Address For Delivery of Shares:

 

 

___________________________________

 

 

___________________________________

 

 

___________________________________

 

7mpr8kpnote.htm

    
      Exhibit (10)(bd)

       

       

       

    

    
      	PROMISSORY
NOTE	 	MELLON BANK,
    N.A.
	$4,000,000	 	February 23,
    1996

    

     

     

     

     

    FOR VALUE
RECEIVED, and intending to be legally bound, Undersigned promises to
pay to MELLON BANK, N.A. ("Bank") or its order at Philadelphia, PA. the sum of
FOUR MILLION DOLLARS ($4,000,000), or such lesser or greater principal amount as
may be outstanding from time to time under the discretionary
line of credit (the “Facility”), established by Bank for the benefit of
Undersigned by letter dated January 31, 1996, the terms of which are
incorporated herein by reference, with interest on the outstanding balance
from the date
of this Note at the rates specified herein below. Defined terms used herein and
not otherwise defined shall have the meanings assigned to them in paragraph
13 hereof.

     

    1. Mandatory
Repayment. Principal shall be payable ON OEMAND, provided however that
any outstanding principal accruing interest at the As-Offered Rate when a
demand for payment is made shall become due and payable immediately
upon expiration of the then current Rate Period applicable to such principal,
unless such demand is made when an Event of Default is continuing, in which
event all principal outstanding hereunder shall he immediately due and payable.
Interest shall be payable at each of the following times: (a)first day of
each month; (b) at the end of each Rate Period specified in each Notification;
and (c) ON DEMAND.
Undersigned understands and agrees that any payments of principal,
interest or other sums required under this Note may be deducted on
the due date, without notice by Bank, from any deposit account maintained by
Undersigned with Bank.
 

    2. Interest
Rate Options. (a) The
outstanding principal balance of this Note
shall accrue interest at the Prime-Based Rate, provided, however, that, subject to
the terms of paragraph 2(b) below, by giving Notification and with Bank's
consent, Undersigned may request to have all or such portion of the
outstanding principal of this Note as hereinafter permitted accrue interest,
instead as follows: (i) at the As-Offered Rate with respect to the principal
amount of any advance under the Facility, from the date of such advance until
the end of the Rate Period specified in the Notification; (ii) at the
AS-Offered Rate with respect to the principal amount of any portion of the
Facility outstanding and accruing interest at the As-Offered Rate at the time of
the Notification related to such principal amount, from the expiration
of the then
current Rate Period related to such principal amount until the end of the Rate
Period specified in the Notification; (iii) at the As-Offered Rate with respect
to all or any portion of the principal amount of the Facility outstanding and
accruing interest at either the Prime-Based Rate or the Federal Funds
Rate at the time of Notification, from the date set forth in the Notification
until the end of the Rate Period specified in the Notification; or (iv) at
the Federal Funds Rate with respect to any portion of principal
amount
outstanding from the date stated in the Notification until converted to the
Prime-Based Rate or the As-Offered Rate or repaid; or (v) at the Federal Funds
Rate with respect to the principal amount of any advance under the Faci1ity
until converted to the Prime-Based Rate or the As-Offered Rate or
repaid.

     

    10044/1/

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    
 

     

     

     

     

     

     

     

     

    
    

     

    (b)
Undersigned understands and agrees: (i) that
Bank, in its sole discretion
from time to time and without notice, may refuse any request of Undersigned to
select, convert to or renew either the As-Offered Rate or the Federal Funds
Rate, (ii) that
subject to the provisions of this Note, the Prime-Based
Rate, the Federal Funds Rate and the As-Offered Rate may apply simultaneously to
different parts of the outstanding principal of this Note, (iii) that the
As-Offered Rate may apply simultaneously to various portions of the outstanding
principal for various Rate Periods, and (iv) that the As-Offered
Rate applicable to any portion of outstanding principal may be different from
the As-Offered Rate applicable to any other portion of outstanding
principal.
 

    3. Prime
Based Rate Fallback.  After expiration of any Rate Period, any
principal portion corresponding to such Rate Period which has not been converted
or renewed in accordance with the paragraph 2 hereof shall accrue interest
automatically at the Prime-Based Rate from the date of expiration of such Rate
Period until paid in full, unless and until Undersigned requests and Bank
approves a conversion to the As-Offered Rate or the Federal Funds Rate in
accordance with paragraph 2. With respect to any principal amount (whether an
advance of new funds or an already outstanding amount), if Undersigned fails
to request
the As-Offered Rate or the Federal Funds Rate option by giving Bank a
Notification, or if Bank fails to approve such request when made, such principal
amount shall be deemed to accrue interest at the Prime-Based Rate.

     

    4. Interest
After Demand or Default.  After all or any part of the
principal of this Note shall have become due and payable as set forth in
paragraph 1 hereof, such amount shall bear interest for each day until paid
(before and after judgment) at a rate per annum which for each day shall be the
greater of (a) 2% above the highest rate of interest which any portion of
outstanding principal is
accruing hereunder on the date of demand or acceleration (as the case may
be), or (b) 2% above the Prime-Based Rate in effect on the date on which
interest is to be calculated.
 

    5. Voluntary
Repayment.  Prior to demand or the occurrence of an Event
of Default
hereunder, (a) Undersigned shall have the right at its option from time to time
to repay that portion of the outstanding principal balance hereof which is
accruing interest at such time at the Prime-Based Rate or the Federal Funds Rate
in whole or in part; and (b) Undersigned shall not have the right to repay all
or any portion of the outstanding principal balance hereof which is accruing
interest at the As-Offered Rate except, as to each portion of principal, at the
end of the Rate Period related thereto. Bank shall apply any amount
received from Undersigned as repayment (whether received pursuant to the
previous sentence or as a result of a demand or after occurrence of an Event of
Default) first, against any amount, other than principal or interest, which may
be due and payable under this Note or under any of the documents executed and
delivered by Undersigned in connection herewith; second, against unpaid
interest; and third, against outstanding principal.
 

    6. Indemnity.  Undersigned
shall indemnify Bank against any loss or expense
(including loss of margin) which Bank has sustained or incurred as a consequence
of: (a) any payment of any principal amount accruing interest at the
As-Offered Rate on a day other than the last day of the corresponding Rate
Period (whether or not any such payment is made pursuant to demand by Bank
under this
Note and whether or not any such payment is consented to by Bank, unless Bank
shall have expressly waived such indemnity in writing); (b) any attempt by
Undersigned to revoke in whole or part any Notification given pursuant to this
Note;

     

    
      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

    

     

    (c) any
attempt by Undersigned to convert or renew any principal amount accruing
interest at the As-Offered Rate on a day other than the last day of the
corresponding Rate Period (whether or not such conversion or renewal is
consented to by Bank, unless Bank shall have expressly waived such indemnity
in writing);
or (d) any breach of or default by Undersigned, any surety or guarantor of
Undersigned's obligations hereunder, or any other person or entity granting Bank
a security interest in property to secure Undersigned's obligations hereunder
(an "Obligor") in the performance or observance of any covenant or condition
contained in this Note or any separate security, guarantee, suretyship or other
agreement between Bank and any Obligor.
 

    If Bank
sustains any such loss or expense it shall from time to time notify Undersigned
of the amount determined in good faith by Bank (which determination shall he
conclusive) to be necessary to indemnify Bank for such loss or
expense.  Such amount shall be due and payable by Undersigned on
demand.  In the event of an occurrence described in (a), (b) or (c) of
this Paragraph 6,
such indemnity shall be an amount equal to the excess of (i) the present value
of the total amount of interest that would have been paid at the As-Offered
Rate during the period from the date of the prepayment, failure to borrow, or
conversion to the end of the Rate Period over (ii) the present value of the
interest that would be earned by the Bank on U.S. Government securities
purchased on the date of prepayment, failure to borrow, or conversion and
maturing at the end of the Rate Period.
 

    7. Records.  The
unpaid principal amount of this Note, the unpaid interest accrued thereon, the
interest rate or rates applicable to such unpaid principal amount, the duration
of such applicability and the date and amount of each
payment or demand shall at all times be ascertained from the books and records
created by Bank, which shall be conclusive absent manifest error.

     

    All notices
(including any Notification) under this Note shall be in writing or by telephone
promptly confirmed in writing, and all such writings shall be sent by
first-class, first-class express or certified mail or by hand delivery, in all
cases with charges prepaid, provided that Bank may act in reliance on any
telephonic notice prior to receipt of written confirmation. All notices
shall be sent to Undersigned at the address stated on the signature
page hereof or in accordance with the last unrevoked written direction from
Undersigned to Bank. All notices by Undersigned shall be effective when received
by Bank at its address at Mellon Bank, N.A., Mellon Bank Center, Plymouth
Meeting Executive Campus, 610 West Germantown Pike, Suite 200, Plymouth Meeting,
PA 19462, and all notices by Bank shall be effective when telephoned, deposited
in the mail or hand delivered.  Written notices or confirmations by
Undersigned shall not be deemed records of Bank within the meaning of this
paragraph whether or not received by Bank and, in the event
that any written
notice sent by Undersigned in confirmation of telephonic notice differs from
Bank's records of such telephonic notice, Bank may act in reliance upon such
telephonic notice as if written notice were not received, provided that Bank has
acted in good faith.  Bank may conclusively rely without
inquiry on any notice or confirmation purporting to be from or authorized by
Undersigned end such reliance shall be presumed to be
correct.

     

    8. Secur1tv
Interest; Time of Essence. The prompt and faithful performance of all of
undersigned's obligations hereunder, including without limitation time of
payment, is of the essence of this Note.

     

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

     

    The
Undersigned hereby grants to Bank a security interest in, lien upon, and right
of setoff against, all deposit accounts, credits, securities, moneys, or
other property of Undersigned which may at any time be in the possession of,
delivered to, or owed by Bank, including any proceeds or returned or
unearned premiums of insurance, and the proceeds of all the foregoing
property.
 

    9. Covenants.  Undersigned
covenants and agrees that until all indebtedness evidenced hereby has been paid
in full, Undersigned shall: (a)use the
proceeds of the loan evidenced hereby only for the purpose specified
to the Bank
at or prior to the execution hereof; (b) furnish or cause to be furnished to
Bank consolidated financial statements prepared in accordance with
generally accepted accounting principles consistently applied by Margolis &
Company P. C., or such other independent certified public accountant
selected by
Borrower and acceptable to Bank, within forty-five (45) days after the end of
each fiscal quarter including a statement of profit and loss for such period
setting forth in compatative form the corresponding figures
from the
corresponding period of the preceding fiscal year and a balance sheet as
of the end of
such period setting forth in comparative form the corresponding figures as of
the end of the preceding fiscal year, in form acceptable to Bank; (c)
furnish or cause to be furnished to Bank consolidated financial statements,
audited in
accordance with generally accepted accounting principles
consistently applied by Margolis & Company P.C., or such other independent
certified public accountant selected by Undersigned and acceptable to Bank,
within ninety (90) days after the end of each fiscal year of Undersigned
including a statement of profit and loss for such period and a balance sheet as
of the end of such period, in each case setting forth in comparative
form the corresponding figures from the corresponding period of the preceding
fiscal year, in form acceptable to Bank; (d) from time to time furnish or cause
to be furnished to Bank, such information concerning the financial condition,
operations, business or affairs of Undersigned as Bank may from time
to time reasonably request; (e) purchase and maintain policies of insurance
to protect against such risks and casualties, and in such amounts, as
shall be required by Bank and/or applicable law; and (f) pay, upon demand by
Bank, all amounts incurred by Bank in connection with any action or proceeding
taken or commenced by Bank to enforce or collect this Note, including attorney's
fees equal to the lesser of (i) 20%
of the principal balance and interest then due hereunder or $500.00, whichever
is greater, or (ii) the maximum amount permitted by law, together with, in each
case, attorney's costs and all costs of legal proceedings.

     

    10. Events
of Default.  The occurrence of any of the following shall
constitute an "Event of Default" hereunder: (a) default in payment or
performance of any of the indebtedness or obligations evidenced by this Note or
any other evidence of liability of Undersigned to Bank; (b) the breach by any
Obligor of any covenants contained in this Note or in any other agreement
between Bank and any Obligor, the occurrence of any default hereunder or under
the terms of any such agreement, or the discovery by Bank of any false or
misleading representation made by any Obligor herein or in any such agreement or
in any other information submitted to Bank by any Obligor; (c) with respect to
any Obligor the dissolution of any partnership or corporation; (d) any
assignment for the benefit of creditors by any Obligor; (e) insolvency of any
Obligor; (f) the filing or commencement of any petition, action, case or
proceeding, voluntary or involuntary, under any state or federal law regarding
bankruptcy, insolvency, reorganization, receivership or dissolution, including
the Bankruptcy Reform Act of 1978, as amended, by or against any Obligor; or (g)
the garnishment, attachment or taking by governmental authority of any property
of Undersigned which is in Bank’s possession or which constitutes security for
any indebtedness evidenced hereby.

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

    

     

    11. Acceleration;
Remedies.  Upon either (i} the occurrence of any Event of
Default, or (ii) demand,
if no Event of Default has occurred: (a) all amounts due
under this Note, including the unpaid balance of principal and interest hereof,
shall become due and payable in accordance with paragraph 1 hereof, without any
demand or notice whatsoever, if Bank so elects; and (b) Bank may
immediately and without demand exercise any of its rights and remedies
granted herein, under applicable law, or which it may otherwise have, against
Undersigned or otherwise.

     

    12. Bank's
Rights.  Undersigned hereby authorizes Bank, and Bank shall
have the continuing right, in its sole option and discretion, to: (a) do any
thing which Undersigned is required but fails to do hereunder, and add any
amounts paid under this paragraph 12 to the principal amount of the indebtedness
evidenced by this Note; and (b) pay the proceeds of the loan evidenced by this
Note to any or all of the Undersigned individually or jointly; or to such other
persons as any of the Undersigned may direct.

     

    13. Definitions.  As
used in this Note:  "As-Offered
Rate" means a per annum rate of interest (computed on the basis of a year
of 360 days and actual days elapsed) offered by Bank in its sole discretion to
Undersigned from time to time for such Rate Period as Bank may elect in its sole
discretion, such interest rate to remain fixed for the duration of such Rate
Period. "Corresponding
Source of Funds" means the proceeds of hypothetical borrowings by Bank of
overnight Federal funds in an aggregate amount approximately equal to the
outstanding principal amount accruing interest at the Federal Funds
Rate.  “Federal
Funds Effective Rate” for any day, as used herein, shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight Federal funds transactions arranged by Federal
funds brokers on the previous trading day, as computed and announced by such
Federal Reserve Bank of New York (or any successor) in substantially the same
manner as such Federal Reserve Bank of New York computes and
announces the weighted average it refers to as the "Federal Funds Effective
Rate" as of the date of this Note; provided, if such Federal Reserve Bank of New
York (or its successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for
the last day on which such rate was announced. Notwithstanding the above, if at
any time Bank shall determine in good faith (which determination shall be
conclusive) that: (i) the Federal Reserve Bank of New York
(or its successor) shall not have announced a Federal Funds Effective Rate on
any day (other than a Saturday, Sunday, public holiday or other day on which no
Federal Funds Effective Rate would normally be announced under the practices of
such Federal Reserve Bank of New York as of the date hereof), (ii) the
effective cost to the Bank of funding any proposed or existing portion of the
principal amount of this Note from a Corresponding Source of Funds shall exceed
the Federal Funds Effective Rate, or (iii) the making,
maintenance or funding of any portion of the principal amount bearing interest
at a rate calculated using the Federal Funds Effective Rate has been made
impracticable or unlawful by compliance by Bank in good faith with any law or
guideline or interpretation
or administration thereof by any Official Body charged with the interpretation
or administration thereof or with any request or directive of any such Official
Body (whether or not having the force of
law); then, and in any such event the portion of the principal balance which
otherwise would accrue interest based upon the Federal Funds Effective Rate
shall accrue interest at the Prime-Based Rate until Bank shall

    

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

    

     

    have
determined in good faith (which determination shall be conclusive} that the
circumstances giving rise to such previous determination no longer exists.
"Federal
Funds Rate" means a per annum rate of interest (based on a year of 360
days and actual days lapsed) for each day equal to the Federal Funds Effective
Rate for such day plus 1.25% per annum, such interest rate to change
automatically from time to time effective as of the date of each change in the
Federal Funds Effective Rate. “Notification”
means telephonic notice (which shall be irrevocable) by Undersigned to Bank that
Undersigned has requested that the As-Offered Rate and/or the Federal Funds Rate
shall apply to some
portion of the principal amount of this Note in accordance with the provisions
of paragraph 2 hereof, which notice shall be given no later than 1:00 p.m.,
local time at the place where this Note is payable, on the day (which shall
be a day on which Bank is opened for business) on which such election is to
become effective, which notice sha1l specify (i) that
the As-Offered
Rate option or the Federal Funds Rate option, as the case may be, is being
selected; (ii) the principal amount to be subject to the As-Offered Rate or the
Federal Funds Rate, as the case may be; (iii) whether such amount is new
advance, a renewal of a previous request of the As-Offered Rate, a conversion
from the Prime-Based Rate to the As-Offered Rate, a conversion from the
Prime-Based Rate to the Federal Funds Rate or a combination thereof; (iv) the
Rate Period selected: and (v) the date on which such request is to become
effective (which date shall be a date selected in accordance with paragraph
2(a) hereof).
"Obligor"
has the meaning assigned to that term in paragraph 6 hereof. "Official
Body" means any government or political subdivision or any agency,
authority or bureau, central bank, commission, department or arbitrator. “Prime
Based Rate” means a per annum rate of interest, calculated on a 360 day
basis but charged on the actual number of days elapsed, equal to the Bank's
Prime Rate such Prime-Based rate to change from time to time as of the effective
date of each change in Prime Rate. "Prime Rate" shall mean the interest rate per
annum announced from time to time by Bank
as its Prime Rate. The
Prime Rate may be greater or less than other interest rates charged by Bank to
other borrowers and is not solely based or dependent upon the rate which Bank
may charge any particular borrower or class of borrowers. “Rate Period"
means for any portion of principal for which Undersigned elects the As-Offered
Rate the period of time for which such AS-Offered Rate shall apply to such
principal portion.  Rate periods shall be for periods of one (1) day
to one hundred eighty (180) days and for no other length of time. "Undersigned"
means, individually and collectively, all makers of this Note.
 

    14. Miscellaneous
Provisions.  (a) Bank shall retain the lien of any judgment
entered on account of the indebtedness evidenced hereby.  Undersigned
warrants that Undersigned has no defense whatsoever to any action or proceeding
that may be brought to enforce or realize on any such
judgment. (b) If any
provision hereof shall for any reason be held invalid or unenforceable, no other
provision shall be affected thereby, and this Note shall be construed as if the
invalid or unenforceable provision had never been a part of it. The descriptive
headings of this Note are for convenience only and shall not in any way affect
the meaning or construction of any provision hereof. (c) The rights and
privileges of Bank contained in this Note shall inure to the benefit of its
successor and assigns, and the duties of Undersigned shall bind all heirs,
personal rep4esentatives, successors and assigns. (d) This Note shall in all
respects be governed by the
law of the state in which this Note is payable (except to the extent that
federal law governs).

     

     

     

     

     

    
      
        
        

      

      
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    15. CONFESSIION
OF JUDGEMENT. Undersigned hereby empowers the prothonotary or any
attorney of any court
of record to appear for Undersigned and to confess judgment as often as
necessary against Undersigned in favor of the holder hereof, as of any term, for
the above sum plus interest due under the terms hereof, together with costs of
leqa1 proceedings and an attorney’s commission equal to the lesser of (a) 20% of
the above sum and interest then due hereunder or $500.00, whichever
is greater, or (b) the maximum amount permitted by 1aw, with release of all
errors.  Undersigned waives all laws, with release of al1
errors.  Undersigned waives a11 1aws exempting rea1 or persona1
property from execution.

     

    Witness the
due execution hereof intending to be legally bound.

     

     

     

     

    
       

      
        	Attest:	 	MET-PRO
      CORPORATION
	 	 	 
	 	 	 
	 	 	 
	/s/ Marian W.
      Berkey      	 	By:/s/ William F.
      Moffitt     (SEAL)
	        
      (Corporate Seal) 	 	   Title:
      VP Finance,
	 	 	          Secretary
      & Treasurer
	 	 	 
	 	 	 
	 	 	By:/s/ William L.
      Kacin       (SEAL)
	 	 	   Title:
      President & CEO
	 	 	 
	 	 	 
	 	 	ADDRESS:
	 	 	160 CASSELL
    ROAD
	 	 	HARLEYSVILLE, PA
      19438

      

       

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    

      
        
           

        

        
          -7-

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