Obligatory Advance Promissory Note - Secured
|
$400,000.00 |
November 30, 2004
|
Orange,
California |
FOR
VALUE RECEIVED, the
receipt and adequacy of which is hereby acknowledged, Centergistic Solutions,
Inc., a California corporation ("Borrower"), promises to pay to the order of
Venture Communications Corporation, a Nevada corporation (the "Payee"), at such
place as may be designated in writing by the holder of this Obligatory Advance
Promissory Note - Secured (the "Note"), the principal amount of Four
Hundred Thousand Dollars ($400,000.00), or such lesser principal amount as may
be equal to the aggregate unpaid amount of all advances made to Borrower
pursuant to this Note, together with interest on the unpaid principal amount
thereof at the rate of ten percent (10%) simple interest per annum (the "Note
Rate"). Interest shall be due and payable monthly.
Xxxxxxxx
is entitled to request and receive advances pursuant to this Note from time to
time. The Board of Directors of Venture Communications has authorized this Note,
in a meeting dated October 15, 2004. The entire unpaid principal amount of this
Note, together with all accrued but unpaid interest thereon and other proper
amounts and charges due hereunder, will become immediately all due and payable
on July 1, 2005 (the “Payoff Date”).
Borrower
may prepay any portion of this Note at any time prior to the Payoff Date without
prepayment penalty of any kind. Borrower must pay all interest currently due, on
the first day of each calendar month. Payments of principal and interest will be
made in legal tender of the United States of America. All payments made pursuant
to this Note will be first applied to accrued and unpaid interest, then to other
proper charges under this Note, and the balance, if any, to principal. All
payments will be made to Venture Communications Corporation at or mailed via the
USPS to:
Venture
Communications
6
Venture
Suite
100
Irvine,
CA 92618
To secure
full payment and timely performance of each of Borrower's obligations hereunder,
Borrower hereby grants to Payee and/or the holder of this Note (“Holder”) a
security interest pursuant to applicable law in and to all of Borrower’s
personal property described as follows (the "Collateral"):
|
All
of Borrower's real and personal assets and properties, tangible and
intangible, including without limitation all software, computer
programming, technology, intellectual property, equipment, patents,
inventory, accounts receivable, securities, contract rights and license
agreements. |
Centergistic
Solutions, Inc.
November
30, 2004
Page 2
of
4
Borrower
will, from time to time, and at its expense, execute, deliver, file and record
any statement, assignment, instrument, document, security agreement, or other
agreement, and take any action (including, without limitation, any filings of
Financing Statements on form UCC-1, or continuation statements under the UCC)
that from time to time may be reasonably requested by Holder to obtain the
benefits of this Note, or with respect to any of the Collateral. Further, Holder
may take such actions as it deems reasonably necessary or appropriate to perfect
its security interest in any item of Collateral, and to the extent permitted by
law, Borrower hereby grants Payee and/or Holder a durable, irrevocable power of
attorney to sign and file such documents as Payee/Holder deems reasonably
necessary or appropriate for that purpose. Xxxxxxxx agrees that a copy of this
Note is sufficient as a ‘Financing Statement’ pursuant to the UCC. Borrower
understands that the foregoing security interest in the Collateral will be a
con-tinuing lien and will include the proceeds and products of such Collateral.
Notwithstanding
anything herein to the contrary, the entire unpaid principal amount of this
Note, together with all accrued but unpaid interest thereon and other unpaid
charges hereunder, will immediately become all due and payable at the election
of Xxxxxx (i) if the maker of this Note, or any guarantor of this Note (the
“Guarantor”), dies or makes an election to wind up and dissolve, or dissolves;
(ii) upon any failure of Borrower to fully pay any Delinquent Amount to Holder
within thirty (30) business days after written demand for such payment is given
by Holder; (iii) if Borrower or Guarantor makes an assignment for the benefit of
its creditors; or (iv) if Borrower or Guarantor becomes unable to pay its debts
as they mature, insolvent or the subject of any proceeding under any bankruptcy,
insolvency or debtor's relief law, including without limitation, any bankruptcy
proceeding. Thereafter, the Note Rate will be an annual rate of interest equal
to the greater of (i) ten percent (10%), or (ii) the advance rate to member
banks established by the Federal Reserve Bank of San Francisco, California,
pursuant to Section 13 of the Federal Reserve Act, plus five (5) percentage
points.
Borrower,
for itself and its permitted legal representatives, successors and assigns,
expressly waives presentment, protest, demand, notice of dishonor, notice of
non-payment, notice of maturity, notice of protest, presentment for the purpose
of accelerating maturity, and diligence in collection. Xxxxxxxx further agrees
that Holder may, without notice, extend the time for payment, or otherwise
modify the terms of payment of any part or the whole of the debt evidenced
hereby, or surrender, release or substitute security for this Note, or assign,
transfer or convey any interest in this Note or the security for this Note, or
grant any other indulgence or forbearance of any kind. Borrower further waives
to the fullest extent of the law (i) any defense that Borrower is exonerated
from its obligations pursuant to this Note by reason of any act or omission by
Xxxxx, Holder or otherwise, (ii) any negligence by Payee or Holder regarding the
exercise of any of its remedies or the perfection of any interest in any
collateral or security, (iii) the statute of limitations with respect to
Borrower's obligations, and (iv) the right to a trial by jury.
Centergistic
Solutions, Inc.
November
30, 2004
Page 3
of
4
If any
installment or other amount payable to Holder pursuant to this Note is not
RECEIVED by
Holder within thirty (30) days after the date that such installment or other
amount becomes first due (the "Due Date"), then such installment or other amount
(the "Delinquent Amount") will bear interest from and after the Due Date until
paid at the Note Rate or the highest rate then permitted by law, whichever is
greater. In addition, Borrower will also pay to Holder each month a late payment
processing fee ("Late Fee") in an amount each month equal to six percent (6%) of
the Delinquent Amount to defray the expense incident to the administration,
processing and collection of the Delinquent Amount. Xxxxxxxx agrees that it
would be impractical to ascertain the exact amount of damage Xxxxxx would incur
to collect Delinquent Amounts and that the Late Fee is a reasonable estimate by
Xxxxxxxx and Xxxxx of the actual amount of damage which will be incurred by
Holder to collect Delinquent Amounts. At the option of Holder from time to time,
the Late Fee will be immediately payable or will be payable on the Payoff
Date.
Any
dispute, action or other proceeding con-cerning this transaction or this Note
will be governed by California law and will be resolved by binding arbitration
to be held exclusively in Orange County, California. Any party may demand
arbitration through written notice to the other (an "Arbitration Demand").
Within fifteen (15) days after the date that the Arbitration Demand is given,
each of the parties will confer to select a mutually acceptable arbitrator from
the Judicial Arbitration and Mediation Services ("JAMS"). Such arbitrator must
be a retired judge and must apply California law, without giving effect to any
conflict of law principles. If the parties do not mutually select an arbitrator,
or if one party refuses to parti-ci-xxxx in the selection process, JAMS will
promptly select the arbitrator, and such selection will be binding on the
parties. If JAMS is unwilling or unable to provide an arbitrator, or if JAMS is
not then in the business of private dispute adjudication, the parties will
confer to select a substitute arbitrator within fifteen (15) days. If the
parties cannot mutually select a substitute arbitrator, or if one party refuses
to parti-ci-xxxx in the process of selecting a substitute arbitrator, the
Presiding Judge of the Orange County Superior Court will select the arbitrator
upon the request of either party, and such selection will be binding on the
parties.
The
arbitrator selected as set forth above will schedule the arbitration hearing
within sixty (60) days after he or she is first selected. The provisions of
sections 1280 and following of the California Code of Civil Procedure relating
to arbitration procedure are specifically waived and will not apply to an
arbitration pursuant to this Agreement. If a party intends to present expert
testimony, all experts such party intends to present as a witness at the
arbitration must be identified to the other party, together with the nature of
the proposed testimony, prior to the arbitration and each expert must be made
reasonably available to the other party for deposition sufficiently in advance
of the arbitration as will afford the other party a reasonable opportunity to
prepare for the arbitration. Moreover, each party must deliver a of copy of each
exhibit, document and similar item that it intends to introduce at the
arbitration sufficiently in advance of the arbitration as will afford the other
party a reasonable opportunity to prepare for the arbitration. Each of the
parties will be permitted to take the deposition of the other party's most
knowledgeable percipient witness. Except as stated in this paragraph, the
parties will not be permitted any written or oral discovery or depositions of
any kind, and the provisions of section 1283.05 of the California Code of Civil
Procedure are specifically waived. The arbitrator will have authority to resolve
any dispute concerning discovery or the use of expert testimony. The parties
will identify issues to be resolved in the arbitration sufficiently in advance
of the arbitration as will afford the other party a reasonable opportunity to
prepare for the arbitration and will exchange arbitration briefs not less than
five days prior to the date of the arbitration.
Centergistic
Solutions, Inc.
November
30, 2004
Page 4
of
4
The
arbitrator will have authority to enter a binding judgment even if a party does
not appear at the arbitration and may also grant any remedy or relief that the
arbitrator reasonably believes to be just or appropriate under California law,
except that no exemplary or punitive damages may be awarded. All fees and
expenses charged by the arbitrator will be advanced by the party initiating the
arbitration. At the conclu-sion of the arbitration, the arbitrator will award
the prevailing party its costs, attorneys' fees and disbursements, including all
arbitration costs. If the arbitration award is not paid within thirty (30) days
after the arbitration award is made, the prevailing party may convert the award
into a judgment and execute upon that judgment. The prevailing party will also
be entitled to all of its post judgment costs, attorneys' fees and
disbursements, incurred in collecting the judgment. To the extent that any rule
established by JAMS conflicts with the provisions of this Agreement, this
Agreement will be controlling.
This Note
may not be changed, modified, amended or terminated orally.
This Note
is personally guaranteed by Xxxxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxxxx, each as
to an undivided fifty percent (50%) of Borrower’s obligations hereunder.
| Dated: November 30, 2004 | "BORROWER" | |
| |
CENTERGISTIC SOLUTIONS,
INC. a California corporation | |
| By: | /s/Xxxxxxx X. Xxxxxxxx | |
|
Xxxxxxx X. Xxxxxxxx. President | ||
| By: | /s/Xxxxx X. Xxxxxxxxxx | |
|
Xxxxx X. Xxxxxxxxxx, CFO | ||
