EXHIIBIT 99.3
10% CONVERTIBLE PROMISSORY
NOTE
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$160,000.00
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October 30, 2006
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FOR VALUE RECEIVED,
the undersigned, DIASYS
CORPORATION, a Delaware Corporation, with an address at 21 West
Main Street, Waterbury, Connecticut 06702 (the
“Company”), promises to pay to the order of MORRIS
SILVERMAN, an individual with a place of business at 790 Estate
Drive, Suite 100, Deerfield, Illinois 60015, ("Payee"), or any
subsequent assignee or holder hereof (Payee or any subsequent
assignee or holder hereof sometimes being hereinafter referred to
as "Holder"), the principal sum of ONE HUNDRED SIXTY THOUSAND
DOLLARS ($160,000.00) , together with: (i) interest on the
unpaid principal balance of this Note, from the date hereof until
said balance shall have been paid in full, at the rate of ten
percent (10%) per annum; (ii) all costs and expenses, including
reasonable attorneys' fees, incurred in collecting or attempting to
collect the indebtedness evidenced by this Note; and (iii) all
taxes or duties assessed upon the indebtedness evidenced by this
Note. All amounts owing under this Note shall be payable in
legal tender of the United States of America.
ARTICLE I
Payment Provisions
Section 1.1- Interest
. The principal balance of the
indebtedness evidenced by this Note outstanding from time to time
shall bear interest, from the date hereof until said indebtedness
shall have been paid in full, at the rate of ten percent (10%) per
annum. Interest shall be calculated on the daily unpaid
principal balance of the indebtedness evidenced by this Note based
on a 360-day year, provided that interest shall be due for the
actual number of days elapsed during each period for which interest
is being charged. Installments of accrued interest shall be due and
payable commencing on the last day of December, 2006, and
continuing on the last day of each March, June, September and
December thereafter so long as any of the indebtedness evidenced by
this Note is outstanding.
Section 1.2- Principal
. The principal amount hereof and all
accrued interest shall be due and payable on November 30, 2007;
provided, however, that from and after such earlier day as the
Company shall have received financing from outside sources of
$1,100,000 or more this Note shall be payable on demand.
Section 1.3- Payment Days
. Any payment under this Note
which is stated to be due on a day other than a "Business Day" (a
day on which banks are open for business in Waterbury, Connecticut)
shall be made on the next succeeding Business Day, and any such
extension of time shall be included in the computation of the
amount of interest to be paid.
Section 1.4- Prepayment
. Company shall have the right to
prepay the indebtedness evidenced by this Note at, in whole or in
part, at any time, without prepayment premium or
penalty.
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Section 1.5- Events of
Default . It shall be an
Event of Default hereunder if Company shall fail to make any
payment under this Note when due. Any failure by Holder to
exercise any right under this Note arising or existing as a result
of such Event of Default, or any delay in such exercise, shall not
constitute a waiver of the right to exercise such right at a later
time so long as such Event of Default shall remain uncured, and
shall not constitute a waiver of the right to exercise such right
if any other Event of Default shall occur. The acceptance by
Holder of payment of any sum payable under this Note after the due
date of such payment shall not be a waiver of Holder's right to
require prompt payment when due of all other sums payable under
this Note.
Section 1.6- Remedies
. Upon the occurrence of any Event
of Default or upon maturity hereof, the outstanding principal
balance of the indebtedness evidenced by this Note shall, at the
option of Holder, bear interest from the date of occurrence of such
Event of Default or such maturity until collection (including any
period of time occurring after judgment), at the "Default Rate",
being the lower of (a) the highest rate allowed by applicable law,
or (b) a rate per annum equal to two percentage points (2.0%) above
the rate or rates that otherwise would have been in effect under
this Note. If the Holder shall not receive the full amount of
any installment of interest or principal due under the terms of
this Note within ten (10) days after the due date of such payment,
then Company shall pay to Holder, upon demand, a late charge equal
to five percent (5%) of such installment, to cover the additional
expenses involved in handling such overdue payment. Such
charge shall be in addition to, and not in lieu of, any other
remedy Holder may have and shall be in addition to, and not in lieu
of, Company's obligation to pay any reasonable fees and charges of
any agents or attorneys employed in the event of any default
hereunder.
Section 1.7- Acceleration
. Upon the occurrence of any Event
of Default, the indebtedness evidenced by this Note shall, at the
option of and without notice or demand by the Holder, become at
once due and payable. Company shall then pay the Holder, in
addition to any and all other sums and charges due, the entire
principal of and interest accrued on this Note.
Section 1.8- Waivers
. Company and each endorser,
guarantor and surety of this Note, and each other person liable or
who shall become liable for all or any part of the indebtedness
evidenced by this Note, hereby:
(a)
waive demand, presentment, protest,
notice of protest, notice of dishonor, diligence in collection,
notice of nonpayment and all notices of a like nature;
and
(b)
to (i) the release, surrender, exchange
or substitution of all or any part of the security for the
indebtedness evidenced by this Note, or the taking of any
additional security, (ii) the release of any or all other persons
from liability, whether primary or contingent, for the indebtedness
evidenced by this Note or for any related obligations, and (iii)
the granting of any other indulgences to any such
person.
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Each endorser, guarantor and surety of
this Note, and each other person liable or who shall become liable
for all or any part of the indebtedness evidenced by this Note,
consent to (i) all renewals, extensions or modifications of this
Note or the Security Documents (including any affecting the time of
payment), and (ii) all advances under this Note or the Security
Documents. Any such renewal, extension, modification,
advance, release, surrender, exchange, substitution, taking or
indulgence may take place without notice to any such person, and,
whether or not any such notice is given, shall not impair the
liability of any such person.
Section 1.9- Commercial
Transaction. COMPANY
AND EACH ENDORSER, GUARANTOR AND SURETY OF THIS NOTE, AND EACH
OTHER PERSON LIABLE OR WHO SHALL BECOME LIABLE FOR ALL OR ANY PART
OF THE INDEBTEDNESS EVIDENCED BY THIS NOTE, HEREBY ACKNOWLEDGE THAT
THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED UNDER CONNECTICUT GENERAL
STATUTES SECTIONS 52-a TO 52-278n, INCLUSIVE, OR BY OTHER
APPLICABLE LAW, HEREBY WAIVE THEIR RIGHT TO NOTICE AND HEARING WITH
RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER OR ITS SUCCESSORS OR
ASSIGNS MAY DESIRE TO USE.
Section 1.10- Severability
. If any one or more of the
provisions of this Note shall for any reason be held to be invalid,
illegal or unenforceable, in whole or in part, or in any respect,
or if any one or more of the provisions of this Note shall operate,
or would prospectively operate, to invalidate this Note, then such
provision or provisions o
