EXHIBIT 4.7
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH NOTE, OR DELIVERY OF AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THIS NOTE
THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH
THE ACT AND APPLICABLE STATE SECURITIES LAWS.
PROMISSORY NOTE
$75,000.00 Laguna Hills, California
November 28, 2001
FOR VALUE RECEIVED, xXxxxxxxxxx.xxx Corporation, a Delaware
corporation ("Borrower"), promises to pay to Frastacky Associates, Inc., an
Ontario, Canada corporation ("Lender"), or order, the principal amount of One
Hundred Twenty Five Thousand Dollars ($125,000.00), with interest from October
18, 2001 on the unpaid principal balance under this Promissory Note (this
"Note") at the rate of ten percent (10%) per annum (on the basis of a 365-day
year and the actual number of days elapsed). The principal amount of this Note
together with all accrued but unpaid interest shall be due and payable on the
sooner of either January 18, 2002, or the date upon which Borrower receives
equity funding designated in representation seven (7) below, (the "Maturity
Date", subject to conversion as provided below). (As used herein, "Lender" shall
refer to the then current registered holder of this Note.)
Concurrently with the issuance of this Note, Borrower is issuing to
Lender a warrant to purchase Seventy Five Thousand (75,000) shares of Borrower's
Common stock at a purchase price of $1.00 per share.
This Note may be converted at the sole option of Lender into shares
of Borrower's Common stock at a purchase price of $0.50 per share, at any time
prior to payment in full of this Note. To effect such conversion, Lender shall
deliver this Note to Borrower for cancellation together with written notice of
conversion. Borrower shall, no later than ten (10) business days after receipt
of this Note and notice of conversion, cancel the Note and issue to Lender or
the holder of the Note stock certificates representing the shares of Common
stock into which this Note is converted.
In order to induce Xxxxxx to accept this Note, Borrower hereby makes
the following representations:
1. To the best knowledge of Borrower, there is no litigation
pending or threatened against Borrower except current litigation with
eSynch Corporation regarding a disputed debt of approximately $40,000.
Xxxxxxxx believes this case is without merit and will defend it
vigorously.
2. To the best knowledge of Borrower, all information and
documents provided to Lender by or on behalf of Borrower, including
unaudited financial statements, are complete and accurate as of the date
thereof.
3. The execution and delivery of this Note and any document
executed as a part of the transaction between Xxxxxx and Borrower
contemplated hereby shall not constitute a breach of or a default under
any agreement or understanding to which the Borrower is a party.
4. Borrower will use the proceeds of this Note only to pay
Xxxxxxxx's trade payables and regular payroll obligations.
5. Xxxxxxxx's offices are located at 00000 Xxxxxxx xx xx Xxxxxxx,
Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000.
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6. Borrower is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware. Borrower is
duly qualified to do business in the State of California. This Note, and
all documents executed as a part of the transaction between Xxxxxx and
Borrower contemplated hereby, have been duly authorized and approved by
Borrower and are legal and binding obligations of Borrower according to
their terms.
7. Borrower anticipates that this Note will be repaid from monies
to be received as a result of the anticipated investment of $2.5 million
by Broad Street Capital Partners I, L.P. in a new corporation to be formed
after the anticipated merger between Borrower and Providence Capital VI,
Inc.
All dollar amounts described in this Note are United States Dollars.
All payments under this Note shall be made to Lender or its order, in lawful
money of the United States of America and in immediately available funds
delivered to Lender at the offices of Lender at its then principal place of
business or at such other place as Lender shall designate in writing for such
purpose from time to time. If a payment under this Note otherwise would become
due and payable on a Saturday, Sunday or legal holiday, the due date thereof
shall be extended to the next day which is not a Saturday, Sunday or legal
holiday, and interest shall be payable thereon during such extension.
This Note may be prepaid in whole or in part at any time, without
premium or penalty. Any prepayment of this Note shall be applied in the
following order: (i) to the payment of accrued but unpaid interest; (ii) to the
payment of outstanding principal; and (iii) to the payment of costs and expenses
provided for under this Note.
No waiver or modification of any of the terms of this Note shall be
valid or binding unless set forth in a writing specifically referring to this
Note and signed by a duly authorized officer of Borrower and of Lender, and then
only to the extent specifically set forth therein.
If any default occurs in any payment due under this Note, Borrower
and any guarantors and endorsers hereof, and their successors and assigns,
promise to pay all costs and expenses, including attorneys' fees, incurred by
Xxxxxx in collecting or attempting to collect the indebtedness under this Note,
whether or not any action or proceeding is commenced. None of the provisions
hereof and none of Xxxxxx's rights or remedies under this Note on account of any
past or future defaults shall be deemed to have been waived by Xxxxxx's
acceptance of any past due payments or by any indulgence granted by Xxxxxx to
Borrower.
Borrower and all guarantors and endorsers hereof, and their
successors and assigns, hereby waive presentment, demand, diligence, protest and
notice of every kind and agree that they shall remain liable for all amounts due
under this Note notwithstanding any extension of time or change in the terms of
payment of this Note granted by Lender or any delay or failure by Lender to
exercise any rights under this Note.
This Note has not been registered under the Act or the securities
laws of any state, in reliance upon exemptions from registration or
qualification. This Note is subject to restrictions on transferability and
resale, and may not be hypothecated, pledged, transferred or sold except as
permitted by registration or exemption under applicable federal and state laws.
This Note is transferable only if Lender supplies evidence satisfactory to
Borrower (which may include opinion of counsel from a law firm acceptable to
Borrower) that Xxxxxx has complied with the appropriate registration
requirements or that such registration is not required. Borrower may deem and
treat the person in whose name this Note is registered as its absolute owner for
the purpose of receiving payments of interest and principal, and for all other
purposes.
This Note is secured by that certain written Security Agreement
dated August 15, 2001 ("Security Agreement"), pursuant to which Xxxxxxxx granted
Lender a security interest in substantially all of the assets of Xxxxxxxx, then
owned or thereafter acquired, and all proceeds thereof. This Note is an
Obligation and future indebtedness of Borrower to Lender as described in the
Security Agreement.
If a court of competent jurisdiction finds that the terms of this
Note violate any applicable usury law, then the obligation to pay interest on
this Note shall be reduced to the maximum legal limit under applicable law
governing the interest payable in connection with this Note, and any amount of
interest paid by Borrower that is deemed in excess of the maximum interest rate
that could be paid at such time shall be deemed to have been a prepayment of
principal (without penalty) on this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of California, without giving effect to the principles thereof
relating to conflicts of law; provided, that, Lender reserves any and all rights
it may have under federal law.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be duly
executed the day and year first above written.
xXxxxxxxxxx.xxx Corporation
a Delaware corporation
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Chief Executive Officer
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