Promissory Note between Jerry Conrad and Quentra Networks, Inc. dated October 19, 2000

Contract Categories: Business Finance Note Agreements
Summary

This agreement is a $2,000,000 promissory note between Jerry Conrad (the borrower) and Quentra Networks, Inc. (the lender). Jerry Conrad promises to repay the loan in three equal annual installments, with interest based on the prime rate, unless certain employment-related events occur. If Jerry Conrad is terminated for cause or resigns voluntarily, the full amount becomes immediately due. However, if he remains employed, each installment may be forgiven. The note is secured by a pledge of stock and includes provisions for default, prepayment, and legal costs. The agreement is governed by California law.

EX-10.5 9 0009.htm PROMISSORY NOTE PROMISSORY NOTE PROMISSORY NOTE
 $2,000,000 October 19, 2000 FOR VALUE RECEIVED, the undersigned, Jerry Conrad ("Borrower"), hereby promises to pay to the order of Quentra Networks, Inc., a Delaware corporation with its principal offices at 1640 S. Sepulveda Blvd., Suite 222, Los Angeles, CA 90025 ("Payee"), the aggregate principal amount of Two Million Dollars ($2,000,000) (the "Principal Amount"), plus interest thereon to accrue commencing on the date hereof at an interest rate per annum equal to the prime rate as published in The Wall Street Journal as of the date hereof, which interest shall be payable at such time as the principal is due hereunder as set forth below, unless previously paid. This Promissory Note is made pursuant to and is the Promissory Note referenced in that certain Personal Services Agreement dated October __, 2000 between Borrower and Payee (the "Personal Services Agreement"), and is subject to the terms of the Personal Services Agreement. Concurrent with the execution and delivery of this Promissory Note, Marine Aircraft, a Nevada corporation, will be delivering a Pledge and Security Agreement (the "Pledge Agreement") under which Marine Aircraft will pledge shares of Common Stock (as defined in the Personal Services Agreement) as security for this Promissory Note. Principal and accrued interest shall be due and payable in three (3) equal annual installments on the second, third and fourth anniversaries of this Promissory Note. Notwithstanding the foregoing, under the terms of the Personal Services Agreement, if Borrower is terminated for "Cause" or if Borrower effects a "Voluntary Termination" of his employment with Payee (each, a "Termination Event"), the entire unpaid balance of principal and interest on this Promissory Note then outstanding shall be forthwith due and payable, and such Termination Event shall constitute a Default (as defined below) hereunder. Further notwithstanding the foregoing, as of each of the second, third and fourth anniversaries of this Promissory Note, and concurrent with the payments to become due hereunder as above set forth, Payee shall forgive the installment of principal and interest then due under this Promissory Note, provided there has been no Termination Event as of each such anniversary. In the event (a) Borrower is terminated under the Personal Services Agreement by the Company without "Cause," (b) Borrower terminates his employment under the Personal Services Agreement for "Good Cause," (c) Borrower dies prior to the fourth anniversary of the date of this Promissory Note, or (d) the closing sales price for the Common Stock on the primary market for such stock or the Nasdaq National Market, whichever is applicable, is equal to or less than $2 (two dollars) for twenty consecutive trading days, all of the outstanding principal and interest due on this Promissory Note shall be forgiven as of the date of such event. "Cause", "Good Cause", "Company", "Common Stock" and "Voluntary Termination" are used in this paragraph with the meanings as defined in the Personal Services Agreement. Borrower may prepay any amount due under this Promissory Note, in whole or in part, at any time without penalty. Payments received for application to this Promissory Note shall be applied first to the payment of accrued interest, if any, and the balance applied in reduction of the principal amount hereof. A default shall occur under this Promissory Note in the event that (i) Borrower shall fail to make any payment in respect of principal or interest on this Promissory Note as the same shall become due, whether by acceleration or otherwise, which failure shall continue for a period of 5 days; (ii) Borrower shall: (A) commence a voluntary case under Title 11 of the United States Code as from time to time in effect, or authorize the commencement of such a voluntary case; (B) have filed against him a petition commencing an involuntary case under said Title 11 which shall not have been dismissed within 30 days after the date on which such petition is filed; (C) seek relief as a debtor under any applicable law, other than said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or consent to or acquiesce in such relief; (D) have entered against him an order by a court of competent jurisdiction (1) finding him to be bankrupt or insolvent, (2) ordering or approving his liquidation, reorganization or any modification or alteration of the rights of his creditors, or (3) assuming custody of, or appointing a receiver or other custodian for all or a substantial part of his property; or (E) make an assignment for the benefit of, or enter into a composition with, his creditors, or appoint or consent to the appointment of a receiver or other custodian for all or a substantial part of his property; (iii) a Termination Event shall have occurred, or (iv) a breach by Marine of the Pledge Agreement shall have occurred (collectively a "Default"). Upon Default, all of the unpaid balance of the principal and interest on this Promissory Note then outstanding shall be forthwith due and payable, and thereupon such unpaid balance or part thereof shall become so due and payable without presentation, protest or demand or notice of any kind, all of which are hereby expressly waived, and the Payee may proceed to enforce payment of such balance or part thereof in such manner as the Payee may elect. Further upon Default, the balance of principal and interest due under this Promissory Note shall bear interest at a rate equal to the lesser of (i) eighteen (18%) percent or (ii) the highest rate allowed by applicable law from the date of such Default until the date that Borrower makes full payment hereunder. Payee shall be entitled to collect all reasonable costs and expenses of collection of amounts due under this Promissory Note. In the event this Promissory Note is placed in the hands of any attorney for collection or is collected through any legal proceedings, Borrower promises to pay (in addition to costs and disbursements otherwise allowed), to the extent permitted by law, reasonable attorneys' fees and legal costs (whether or not suit is commenced and whether or not incurred in connection with appeal of a lower court judgment or order or in collecting any judgment entered therein). This obligation shall survive payment of this Promissory Note. Any notice or other communication required or permitted under this Promissory Note shall be in writing and shall be deemed to have been duly given if delivered by hand, overnight delivery, or mailed, postage prepaid, by certified or registered mail, return receipt requested, and addressed to Borrower at his address given below and to Payee at its address given above. Borrower and Payee shall be obligated to notify the other party of any change in address. Notice of change of address shall be effective only when made in accordance with this paragraph. BORROWER HEREBY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF CALIFORNIA. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS PROMISSORY NOTE, OR THE TRANSACTIONS CONTEMPLATED THEREBY. The rights or remedies of Payee as provided in this Promissory Note, as well as any other remedy provided at law or in equity, shall be cumulative and concurrent and may be pursued singly, successively or together against Borrower. Borrower, for itself and its successors and assigns, hereby: (a) waives presentment, demand, protest, notice of protest, notice of dishonor and all other notices and demands whatever; and (b) consents to extensions of time for payment, and acceptance of late or partial payments before, at or after maturity. No failure on the part of the Payee to exercise any right or remedy under this Promissory Note shall constitute a waiver of such right or remedy, and no waiver of any past default shall constitute waiver of any future default or of any other default. No indulgence granted from time to time, shall be construed to be a waiver of the right to insist upon prompt payment thereafter retroactively or prospectively, or shall be deemed to be a novation of this Promissory Note or as a reinstatement of the debt evidenced hereby or as a waiver of any other right, or be construed so as to preclude the exercise of any right that the Payee may have, whether by the laws of the jurisdiction governing this Promissory Note, by agreement, or otherwise; and the Borrower expressly waives the benefit of any statute or rule of law or equity which would produce a result contrary to or in conflict with the foregoing. The acceptance by the Payee of any payment that is in an amount less than the amount that is due shall not constitute an accord and satisfaction. If any provision of this Promissory Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Promissory Note; but this Promissory Note shall be construed as if such invalid, illegal or unenforceable provision (or part thereof) had not been contained in this Promissory Note, but only to the extent it is invalid, illegal or unenforceable. Time is of the essence of this Promissory Note and of each and every obligation of the Borrower hereunder. This Promissory Note may not be amended orally, but only by an amendment in writing signed by Borrower and Payee. THIS PROMISSORY NOTE MAY BE ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED BY PAYEE WITHOUT THE CONSENT OF BORROWER. Reference in this Promissory Note to "Payee" shall mean the original Payee hereunder so long as such Payee shall be holder of this Promissory Note and thereafter shall mean any assignee of Payee or subsequent holder of this Promissory Note. This Promissory Note shall be binding upon Borrower and its successors and assigns and shall inure to the benefit of Payee. This Promissory Note shall be governed in all respects in accordance with the laws of the State of California. BORROWER: /s/ Jerry Conrad -------------------------- Jerry Conrad, Individually Borrower's Address: ------------------------ ------------------------