Exhibit 99.2
SECURED DEMAND NOTE
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$1,000,000 October 17, 2006
New York, New York
FOR VALUE RECEIVED, each of ONE IP VOICE, INC., a Delaware corporation
(f/k/a Farmstead Telephone Group, Inc) (the "Company") and OIPV CORP., a
Delaware corporation (f/k/a One IP Voice, Inc.) ("OIPV" and, together with the
Company, the "Makers" and each, a "Maker"), hereby jointly and severally
promises to pay to LAURUS MASTER FUND, LTD. (the "Payee"), ON DEMAND after
termination of the Forbearance Period under and as defined in the Forbearance
Agreement (as hereafter defined), at c/o Laurus Capital Management, LLC, 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
may be designated in writing by the holder of this Note, the principal sum of
One Million ($1,000,000) DOLLARS, or, if different, the aggregate principal
amount of all sums owing hereunder, which shall be payable in lawful money of
the United States of America, together with interest on the unpaid principal
balance computed from the date hereof at a rate per annum equal to the "prime
rate" published in The Wall Street Journal from time to time (the "Prime Rate"),
plus two percent (2.0%). Interest shall be calculated on the basis of the actual
number of days elapsed over a year of 360 days and shall be paid on the first
business day of each month, commencing on November 1, 2006.
1. DEFAULT INTEREST. If the principal indebtedness is not paid in full
when due, the Makers shall thereafter, jointly and severally pay interest on the
principal sum then remaining unpaid from the due date until the date on which
the principal sum then outstanding is paid in full (whether before or after
judgment), at a rate per annum (calculated for the actual number of days elapsed
on the basis of a 360-day year) equal to the rate initially payable hereunder
plus an additional 2.0%; provided, however, that such interest rate shall in no
event exceed the maximum interest rate which the Makers may by law pay.
2. ADVANCES. The Makers and Payee hereby acknowledge and agree that so
long as no Forbearance Default (as hereafter defined) shall have occurred and be
continuing, (a) Payee shall on Wednesday, October 18, 2006, make an initial
advance of funds hereunder to Makers in an aggregate amount equal to Five
Hundred Thousand Dollars ($500,000) and (b) upon Xxxxx's receipt of evidence
reasonably satisfactory to Payee that one or more of the Makers shall have
received cash proceeds of the bridge and/or follow-on financing as expressly
provided for in Section 4.1 of the Forbearance Agreement (as hereafter defined)
(collectively, the "Bridge Financing"), Payee shall, at Makers' written request
therefor, make additional advances of funds hereunder to Makers (the "Additional
Advances") in an aggregate amount equal to thirty-seven and one-half percent
(37.5%) of the gross proceeds of such Bridge Financing; provided, however, in
the event the Makers (either individually or collectively) do not actually
receive and retain in the aggregate at least 90% of the gross proceeds of such
Bridge Financing, then the Additional Advances shall not exceed an aggregate
amount equal to thirty-seven and one-half percent
(37.5%) of the net proceeds actually received and retained by one or more of the
Makers; provided that the aggregate principal amount of advances outstanding
hereunder shall not at any time exceed $1,000,000. The Makers shall only use the
net proceeds of the Bridge Financing for working capital and ordinary course of
business purposes. Advances made hereunder shall not be permitted to be
reborrowed once repaid. For purposes hereof, the following terms shall have the
following meanings: (a) "Forbearance Agreement" shall mean the Amendment and
Forbearance Agreement dated as of the date hereof by and among the Makers and
Payee, as amended, modified, supplemented, extended, renewed, restated or
replaced from time to time, and (b) "Forbearance Default" shall have the meaning
set forth in the Forbearance Agreement.
3. AUTHORITY. Each Maker (and the undersigned representatives of such
Maker, if any) represents that such Maker has full power, authority and legal
right to execute and deliver this Note and that this Note constitutes a valid
and binding obligation of such Maker.
4. DEFINED TERMS. Whenever used, the singular number shall include the
plural, the plural the singular, and the words "Payee" and "Maker" shall
include, respectively, their respective successors and assigns; provided,
however, that no Maker shall in any event or under any circumstance have the
right to assign or transfer its obligations under this Note or the related
documents, in whole or in part, to any other person, party or entity.
5. HEADINGS, ETC. The headings and captions of the numbered paragraphs of
this Note are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
6. ENFORCEABILITY. Each Maker acknowledges that this Note and such Maker's
obligations under this Note are and shall at all times continue to be absolute
and unconditional in all respects, and shall at all times be valid and
enforceable irrespective of any other agreements or circumstances of any nature
whatsoever which might otherwise constitute a defense to this Note and the
obligations of such Maker under this Note or the obligations of any other person
or party relating to this Note. This Note and the instruments and documents
executed in connection with the transactions contemplated hereby (collectively
and as the same may be amended or otherwise modified from time to time, the
"Documents") set forth the entire agreement and understanding of the Payee and
the Makers, and each Maker absolutely, unconditionally and irrevocably waives
any and all right to assert any set-off, counterclaim or crossclaim of any
nature whatsoever with respect to this Note or the obligations of such Maker
hereunder or thereunder, or the obligations of any other person or party
relating hereto or thereto or to the obligations of such Maker hereunder or
thereunder or otherwise in any action or proceeding brought by the Payee to
collect the Note, or any portion thereof, or to enforce, foreclose and realize
upon the liens and security interests of the Payee in any collateral Each Maker
acknowledges that no oral or other agreements, conditions, promises,
understandings, representations or warranties exist with respect to this Note or
with respect to the obligations of such Maker under this Note, except those
specifically set forth in this Note and the Documents.
7. WAIVER. Each Maker waives presentment, demand for payment, notice of
dishonor and any or all notices or demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note and consents to any
or all delays, extensions of time, renewals, release of any party to any
Document, and of any available security therefor, and any
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and all waivers or modifications that may be granted or consented to by the
Payee with regard to the time of payment or with respect to any other provisions
of any of the Documents, and agrees that no such action, delay or failure to act
on the part of the Payee shall be construed as a waiver by the Payee of, or
otherwise affect, in whole or in part, its right to avail itself of any remedy
with respect thereto. No notice to or demand on the Makers shall be deemed to be
a waiver of the obligation of the Makers or of the right of the Payee to take
further action without further notice or demand as provided in any of the
Documents.
8. AMENDMENTS. This Note may not be modified, amended, changed or
terminated orally, except by an agreement in writing signed by each Maker and
the Payee. No waiver of any term, covenant or provision of this Note shall be
effective unless given in writing by the Payee and, if so given by the Payee,
shall only be effective in the specific instance in which given.
9. GOVERNING LAW. This Note is and shall be deemed entered into in the
State of New York and shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principles of conflicts of
laws.
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IN WITNESS WHEREOF, each Maker has duly executed this Note the day and
year first above written.
ONE IP VOICE, INC. (f/k/a Farmstead
Telephone Group, Inc.)
By: /s/ Xxxx-Xxxx Xxxxxxxxxxx
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Name: Xxxx-Xxxx Xxxxxxxxxxx
Title: C.E.O.
WITNESS:
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OIPV CORP. (f/k/a One IP Voice, Inc.)
By: /s/ Xxxx-Xxxx Xxxxxxxxxxx
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Name: Xxxx-Xxxx Xxxxxxxxxxx
Title: President
WITNESS:
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AGREED TO AND ACKNOLWEDGED:
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxx Xxxx
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Its: Director
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