Exhibit 10.13
THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF, AND,
EXCEPT AS STATED IN THE NOTE AND WARRANT PURCHASE AGREEMENT DATED SEPTEMBER 4,
2001, PURSUANT TO WHICH SUCH SECURITIES WERE ISSUED, SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
OR REGULATION A NOTIFICATION UNDER THE ACT COVERING SUCH SECURITIES OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY),
REASONABLY SATISFACTORY IN FORM AND CONTENT TO THE COMPANY, STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT.
$500,000.00 SEPTEMBER 4, 2001 TEMPE, ARIZONA
PROMISSORY NOTE
FOR VALUE RECEIVED, Vitrix, Inc., a Nevada corporation (the "COMPANY"),
hereby promises to pay to the order of Xxxxxxx X. Xxxxx ("HOLDER"), or Holder's
registered assigns, the principal sum of Five Hundred Thousand Dollars
($500,000.00) or, if less, the aggregate unpaid principal amount this Note on
the Maturity Date (as defined herein); together with interest on any and all
principal amounts remaining unpaid hereunder from time to time outstanding from
the date hereof until payment in full.
1. NOTE PURCHASE AGREEMENT. This Note has been issued to Holder by the
Company pursuant to the Note and Warrant Purchase Agreement dated of even date
herewith (the "NOTE PURCHASE AGREEMENT"), between the Company and the Holder.
Capitalized terms used herein but not herein defined shall have the meanings
ascribed thereto in the Note Purchase Agreement, unless the context otherwise
requires.
2. INTEREST. Interest on the outstanding principal balance of this Note
shall be payable in arrears on the first day of each month commencing October 1,
2001 (and on the first day of each month thereafter), and on the Maturity Date
to the extent accrued and unpaid. Except as otherwise provided below, interest
will accrue on the then unpaid principal balance of this Note outstanding during
any month, or partial month, at the rate of ten percent (10.0%) per annum,
calculated on the basis of the actual number of days elapsed and on the basis of
a 360 day year. Except as provided herein or in the Note Purchase Agreement, all
accrued interest on this Note shall be paid at Maturity. If the Company shall
default in the payment of the principal of or interest on this Note, the Company
shall on demand from time to time pay interest (i) on the amount of such
defaulted principal and, (ii) to the extent permitted by law, on the amount of
such defaulted interest up to the date of actual payment of such defaulted
principal and interest amounts (as well as before judgment), at a rate per annum
equal to two percent (2%) in excess of the rate otherwise applicable to such
obligations.
(b) The principal balance outstanding hereunder shall be payable in
sixty (60) monthly principal and interest installments of $6,600.00 commencing
on October 1, 2001, and on each month thereafter until September 1, 2006. The
remaining principal balance of $313,396.14 shall be due and payable on the
Maturity Date (as defined below).
3. PREPAYMENT. This Note may be prepaid at any time without penalty. Any
prepayment hereunder shall be credited first upon interest accrued and the
remainder, if any, upon the outstanding principal amount of this Note.
4. PAYMENT ON MATURITY DATE. The date (the "MATURITY DATE") upon which this
Note matures and the principal hereof and all interest accrued hereon become due
shall be October 1, 2006.
5. PAYMENTS.
(a) All payments of principal and interest due in respect of this Note
shall be made without deduction, defense, set off or counterclaim, in lawful
money of the United States of America, and in same day funds and delivered to
the Holder by wire transfer to a bank account of Holder, as specified by Holder
from time to time, or at such other place as shall be designated by notice for
such purpose in accordance with the terms of the Note Purchase Agreement.
(b) Principal payments due in respect of this Note shall be payable in
sixty (60) monthly installments payable on the first day of each calendar month
commencing on October 1, 2001, and on the first day of each month thereafter
until the September 1, 2006. If a payment date is not a Business Day, then any
such payment due under this Note shall be made on the next succeeding Business
Day.
6. NOTE. This Note is secured by all of the Company's assets, which
security interest is evidenced by the Security Agreement, and is entitled to the
benefits of such Security Agreement.
7. EVENTS OF DEFAULT. If any event of default set forth below ("EVENT OF
DEFAULT") occurs, the entire unpaid principal balance and accrued interest
payable hereunder shall automatically become immediately due and payable without
presentment, demand or notice of any kind, all of which are hereby expressly
waived by the Company:
(a) If default shall be made in the due and punctual payment of any
principal of or premium (if any) on, the Note when and as the same shall become
due and payable, whether at maturity or a date fixed for prepayment or by
declaration or otherwise, which default is not cured within fifteen (15) days;
or
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(b) If default shall be made in the due and punctual payment of any
interest on the Note when and as such interest shall become due and payable, and
such default shall have continued for a period of fifteen (15) days; or
(c) If any representation or warranty made or deemed to be made by or
on behalf of the Company in the Note Purchase Agreement or this Note or in any
certificate, statement, report or other instrument delivered under or pursuant
to any term hereof or thereof shall prove to have been untrue or incorrect in
any material respect as of the date of this Note or as of the Closing Date, or
if any statement, report, certificate, financial statement or financial schedule
or other writing or instrument prepared or purporting to be prepared by the
Company or any officer of the Company that is hereafter furnished or delivered
in connection with or under or pursuant to or contemplated by this Note to Buyer
shall prove to be untrue or incorrect in any material respect as of the date it
was made, furnished or delivered; or
(d) If the validity or enforceability of this Note shall be contested
by either the Company or any security holder of the Company or any action, suit
or proceeding is commenced that alleges or contends that this Note is no longer
in full force or effect or is null and void or the Company denies that it has
any further liability or obligation under this Note; or
(e) If the Company shall (i) file a petition seeking relief for itself
under Title 11 of the United States Code, as now constituted or hereafter
amended, or file an answer consenting to, admitting the material allegations of,
or otherwise not controverting, or fail timely to controvert, a petition filed
against it seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or (ii) file such a petition or answer with
respect to relief under the provisions of any other now existing or future
applicable bankruptcy, insolvency, or other similar law of the United States of
America, or State thereof, or of any other country or jurisdiction providing for
the reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with its creditors; or
(f) If an order for relief shall be entered against the Company under
Title 11 of the United States Code, as now constituted or hereafter amended,
which order is not stayed; or upon the entry of an order, judgment or decree by
operation of law, or by a court having jurisdiction in the premises which is not
stayed, adjudging it a bankrupt or insolvent under, or ordering relief against
it under, or approving as properly filed a petition seeking relief against it
under, the provisions of any other now existing or future applicable bankruptcy,
insolvency or other similar law of the United States of America or any State
thereof, or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or any arrangement,
composition, extension or adjustment with creditors, or appointing a receiver,
liquidator, assignee, sequestrator, trustee or custodian of the Company or any
Subsidiary or any substantial part of its property, or ordering the
reorganization, winding-up or liquidation of its affairs or upon the expiration
of thirty (30) days after the filing of any involuntary petition against it
seeking any of the relief specified in paragraph (e) or this paragraph (f)
without the petition being dismissed prior to that time; or
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(g) If the Company shall (i) make a general assignment for the benefit
of its creditors, (ii) consent to the appointment of or taking possession by a
receiver, liquidator, assignee, sequestrator, trustee or custodian of the
Company of all or a substantial part of its property, or (iii) admit its
insolvency or inability to pay its debts generally as such debts become due, or
(iv) fail generally to pay its debts as such debts become due, or (v) take any
action (or if such action is taken by its directors or stockholders) looking to
the dissolution or liquidation of the Company; or
(h) If a final judgment for the payment of money in excess of $100,000
shall be rendered by a court of record against the Company and the Company or
shall not (i) within 30 days from the date of entry thereof, discharge the same
or provide for its discharge in accordance with its terms, or procure a stay of
execution thereof, and (ii) if execution of such judgment shall be stayed,
within such period of 30 days or such longer period during which the execution
of such judgment shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal, or, after the expiration of
any such stay or the denial of such appeal, forthwith discharge the same or
provide for its discharge.
8. ENFORCEMENT. If any one or more Events of Default shall have occurred,
the Holder may proceed to protect and enforce the rights of the Holder by suit
in equity or action at law or the employment of any other available right or
remedy, as the Holder shall deem most effective to protect and enforce any such
rights. The Company promises to pay all costs and expenses, including reasonable
attorneys' fees and expenses, incurred in the collection and enforcement of this
Note. The Company and endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind (except
such notices as may be required under the Note Purchase Agreement) and, to the
full extent permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
9. WAIVERS AND AMENDMENTS. The Note Purchase Agreement and this Note may be
amended only with the written consent of the Holder.
10. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the internal laws (but not the law of choice of
laws) of the State of Arizona.
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IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year first written
above.
VITRIX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: President & Chief Executive Officer
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