Revolving Promissory Note

REVOLVING PROMISSORY NOTE

$ St. Louis, Missouri

FOR VALUE RECEIVED, the undersigned, EVEREST & JENNINGS INTERNATIONAL LTD., a Delaware corporation, and EVEREST & JENNINGS, INC., a California corporation (collectively, the "Borrowers"), hereby jointly and severally promise to pay to the order of BEL (FAR EAST HOLDINGS) LIMITED, a Hong Kong corporation (the "Holder"), at its office at , or such other address as the Holder shall specify in writing to the Borrowers, in lawful money of the United States and in immediately available funds, the principal amount of Twelve Million Four Hundred Sixty-Five Thousand Six Hundred Eighty-Seven Dollars ($12,465,687.00) or the aggregate unpaid principal balance of all amounts from time to time outstanding hereunder in accordance with the provisions of Section 4.1 of that certain Debt Conversion Agreement, dated as of , among the Holder, the Borrowers and The Jennings Investment Co. (as at any time amended, supplemented or modified, the "Debt Conversion Agreement"), as set forth in the Schedule to Revolving Promissory Note (the "Schedule") attached hereto as Exhibit and by this reference incorporated herein, whichever is less, together with accrued, unpaid interest thereon, on (the "Maturity Date"), or as such Maturity Date may be extended from time to time by agreement among the Holder and the Borrowers. This Revolving Promissory Note is the "Revolving Promissory Note" referred to in the Debt Conversion Agreement, the terms and conditions of which hereby are incorporated herein by reference. Capitalized terms not otherwise defined in this Revolving Promissory Note shall have the meanings specified in the Debt Conversion Agreement.

Interest under this Revolving Promissory Note (computed on the basis of actual days elapsed and a year of 360 days) shall accrue on the outstanding principal balance of this Revolving Promissory Note from the date hereof until the Maturity Date, at the rate of per annum. The Borrowers will repay in full all principal, accrued, unpaid interest and other charges outstanding under this Revolving Promissory Note no later than the Maturity Date.

This Revolving Promissory Note is secured by a Security Agreement of even date herewith (the "Security Agreement") among the Borrowers and the Holder. Reference hereby is made to the Security Agreement for a description of the collateral pledged pursuant thereto, and any holder of this Revolving Promissory Note is entitled to the benefit of the security interest provided therein.

The occurrence and continuance of any one or more of the following events shall constitute an "Event of Default" hereunder:

(a) the Borrowers fail to pay any amount due under this Revolving Promissory Note within two days of the date when due;

(b) the Borrowers fail to observe, perform or comply with any other covenant, agreement or term contained in this Revolving Promissory Note, and, if subject to remedy, the same is not remedied within 30 days after written notice from the Holder; provided, however, that such 30-day period shall be extended for an additional 30 days so long as within such initial 30-day period the Borrowers have commenced to cure and are proceeding with due diligence to cure such failure; or

(c) either Borrower makes a general assignment for the benefit of creditors; any proceeding is instituted by or against either Borrower seeking to adjudicate it a bankrupt or insolvent, seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debts, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property, provided that, in any such case, if the same is dismissed or vacated within 60 days of being instituted, then any such default shall be deemed cured; or either Borrower takes any corporate action to authorize any of the actions set forth above.

Upon any "Event of Default" as defined herein, the Holder may, at its sole option, declare the entire amount of principal and accrued, unpaid interest on this Revolving Promissory Note immediately due and payable, by written notice to the Borrowers, in which event the Borrowers immediately shall pay to the Holder the entire unpaid principal balance of this Revolving Promissory Note together with accrued, unpaid interest thereon to the date of such payment. No delay or omission of the Holder to exercise any right or power occurring upon any Event of Default hereunder shall impair any such right or power or shall be construed as a waiver of any such Event of Default or an acquiescence therein. To the fullest extent permitted by law, the Holder's rights and remedies under this Revolving Promissory Note shall be cumulative, and the Holder shall have all other rights and remedies not inconsistent herewith as are provided under the Uniform Commercial Code as in effect in the relevant jurisdictions, by law and in equity. No exercise by the Holder of one right or remedy shall be deemed an election, no waiver by the Holder of any default on the part of the Borrowers shall be deemed a continuing waiver, and no delay by the Holder shall constitute a waiver, election or acquiescence by it.

A waiver of any term of this Revolving Promissory Note must be made in writing and shall be limited to the express written terms of such waiver. No previous waiver and no failure or delay by the Holder in acting with respect to the terms of this Revolving Promissory Note shall constitute a waiver of any breach, default or failure of condition under this Revolving Promissory Note.

The Borrowers waive presentment, demand, notice of dishonor, notice of default or delinquency, notice of acceleration, notice of protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of interest on interest and diligence in taking any action to collect any sums owing under this Revolving Promissory Note or in proceeding against any of the rights or interests in or to properties securing payment of this Revolving Promissory Note.

Time is of the essence with respect to every provision hereof.

The Borrowers hereby authorize the Holder to endorse on the Schedule annexed to this Revolving Promissory Note all loans made to the Borrowers and all payments of principal amounts in respect of such loans made in accordance with the Additional BEL Loan Facility under the Debt Conversion Agreement, which endorsements shall, in the absence of manifest error, be conclusive as to the outstanding principal balance of all loans under this Revolving Promissory Note; provided, however, that the failure to make an endorsement or the inaccuracy of any endorsement shall not limit or otherwise affect the obligations of the Borrowers under the Debt Conversion Agreement or this Revolving Promissory Note.

Notwithstanding any other provision of this Revolving Promissory Note to the contrary, all agreements among the Borrowers and the Holder are expressly limited, so that in no event or contingency whatsoever, whether by reason of the advancement of the proceeds of this Revolving Promissory Note, acceleration of maturity of the unpaid principal balance, the addition of accrued interest to principal or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance or detention of the money to be advanced under this Revolving Promissory Note exceed the highest lawful rate permissible under applicable usury laws. If, under any circumstances whatsoever, fulfillment of any provision of this Revolving Promissory Note or any other agreement pertaining to this Revolving Promissory Note, after timely performance of such provision is due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction deems applicable, then the obligations to be fulfilled shall be reduced to the limit of such validity, and if, under any circumstances whatsoever, the Holder shall ever receive as interest an amount that exceeds the highest lawful rate, the amount that would be excessive interest shall not be required to be paid by the Borrowers, and the Holder shall hold in trust and return to the Borrowers any interest paid hereunder in excess of the highest lawful rate.

If any action at law or in equity is necessary to enforce or interpret the terms of this Revolving Promissory Note or the rights and duties of the parties in. relation hereto, the prevailing party will be entitled, in addition to any other relief granted, to all costs and expenses incurred by such prevailing party, including, without limitation, all reasonable attorneys' fees.

This Revolving Promissory Note is delivered in the State of Missouri and shall be construed and enforced in accordance with, and governed by, the laws of the State of Missouri without application of the conflict of laws provisions or principles thereof. All persons and entities in any manner obligated under this Revolving Promissory Note hereby consent to the jurisdiction of any federal or state court within the State of Missouri having proper venue, and also consent to service of process by any means authorized by federal or Missouri law.

EVEREST & JENNINGS INTERNATIONAL

LTD., a Delaware corporation

EVEREST & JENNINGS, INC., a California corporation