EXHIBIT 1
BIG INTERACTIVE GROUP, LLC
A Delaware Limited Liability Company
PROMISSORY NOTE
$_______ March 20, 2003
FOR VALUE RECEIVED, BIG INTERACTIVE GROUP, LLC, a Delaware limited
liability company (the "Company"), with its principal offices at 000 Xxxxx
Xxxxxxx Xxx Xxxxxxxxx, Xxxxxxx Xxx, Xxxxxxxxxx 00000, promises to pay to the
order of _______________________, or his assigns (the "Holder"), the principal
amount of ________, in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public or
private debts, together with simple interest accrued from the date hereof at the
rate of 6% percent per annum; provided, however, subject to conditions set forth
in Section 4.2 herein, if this Note is paid in full with six months from the
date hereof, the principal amount due under this Note shall be reduced by 10%.
Payments of principal and interest are to be made at the address of the Holder
designated above or at such other place as the Holder shall have notified the
Company in writing at least five days before such payment is due.
Interest shall be computed on the basis of a 360-day year. Interest shall
be due and payable in 12 equal monthly installments of $_______ with the first
payment due on April 20, 2003 and the final payment due on March 20, 2004 (the
"Maturity Date"). The entire principal amount of $______________ shall be due
and payable on the Maturity Date.
The payment of principal and interest under this Note shall be personally
guaranteed Xxxx Xxxxxx, an individual residing at 000 Xxxxx Xxxxxxx Xxx
Xxxxxxxxx, Xxxxxxx Xxx, Xxxxxxxxxx 00000. A copy of the guaranty is annexed
hereto as Exhibit A.
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1. Events of Default. (a) Upon the occurrence of any of the following
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events (herein called "Events of Default"):
(i) The Company shall fail to pay the principal of or interest on
this Note when due hereunder (subject to a ten-day grace period);
(ii) (A) The Company shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement, readjustment
of its debts, receivership, dissolution, liquidation, winding-up, composition or
any other relief under any bankruptcy law, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition, readjustment
of debt or any other similar act or law, of any jurisdiction, domestic or
foreign, now or hereafter existing; or (B) the Company shall admit the material
allegations of any petition or pleading in connection with any such bankruptcy
proceeding; or (C) the Company shall apply for, or consent or acquiesce to, the
appointment of a receiver, conservator, trustee or similar officer for it or for
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all or a substantial part of its property; or (D) the Company shall make a
general assignment for the benefit of creditors;
(iii) (A) The commencement of any proceedings or the taking of any
other action against the Company in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts, liquidation, dissolution, arrangement,
composition, or any other relief under any bankruptcy law or any other similar
act or law of any jurisdiction, domestic or foreign, now or hereafter existing
and the continuance of any of such events for 30 days uncontested, undismissed,
unbonded or undischarged; or (B) the appointment of a receiver, conservator,
trustee or similar officer for the Company for any of its property and the
continuance of any of such events for 30 days uncontested, undismissed, unbonded
or undischarged; or (C) the issuance of a warrant of attachment, execution or
similar process against any of the property of the Company and the continuance
of such event for 30 days uncontested, undismissed, unbonded and undischarged;
(iv) The Company shall fail to comply with any of its material
obligations under this Note; or
(v) Any judgment or judgments against the Company or any
attachment, levy or execution against any of its properties for any amount in
excess of $50,000 in the aggregate shall remain unpaid, or shall not be
released, discharged, dismissed, stayed or fully bonded for a period of 30 days
or more after its entry, issue or levy, as the case may be;
then, and in any such event, the Holder shall, at its option upon written notice
to the Company, declare the entire principal amount of this Note then
outstanding together with accrued unpaid interest thereon immediately due and
payable, and the same shall forthwith become immediately due and payable without
presentment, demand, protest, or further notice of any kind, all of which are
expressly waived. If the Note is not paid in full upon acceleration, as required
above, interest shall accrue on the outstanding principal of and interest on
this Note from the date of the Event of Default up to and including the date of
payment at a rate equal to the lesser of 10% percent per annum or the maximum
interest rate permitted by applicable law.
(b) Non-Waiver and Other Remedies. No course of dealing or delay on
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the part of the Holder of this Note in exercising any right hereunder shall
operate as a waiver or otherwise prejudice the right of the Holder of this Note.
No remedy conferred hereby shall be exclusive of any other remedy referred to
herein or now or hereafter available at law, in equity, by statute or otherwise.
(c) Collection Costs; Attorneys' Fees. If any legal proceeding is
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brought for the enforcement of this Note, and a final judgment in rendered by a
court of competent jurisdiction in connection therewith, the successful or
prevailing party shall be entitled to recover from the other party reasonable
attorneys' fees and other expenses and costs incurred in connection with such
proceeding.
2. Obligation to Pay Principal and Interest. No provision of this Note
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shall alter or impair the obligation of the Company, which is absolute and
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unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, at the rates, and in the currency herein prescribed.
3. Covenants. The Company covenants and agrees that, while this Note is
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outstanding it shall:
3.1. Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon any
properties belonging to it before the same shall be in default; provided,
however, that the Company shall not be required to pay any such tax, assessment,
charge or levy which is being contested in good faith by proper proceedings and
adequate reserves for the accrual of same are maintained if required by
generally accepted accounting principles;
3.2. Use commercially reasonable efforts to preserve its existence
and continue to engage in the business of the same general type as conducted as
of the date hereof; and
3.3. Comply in all material respects with all statutes, laws,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations and requirements (the "Requirement(s)") of all
governmental bodies, departments, commissions, boards, courts, authorities,
officials, or officers, which are applicable to the Company or its business;
except wherein the failure to comply would not have a material adverse effect on
the Company or its business; provided that nothing contained herein shall
prevent the Company from contesting the validity or the application of any
Requirements.
4. Repayment.
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4.1. Consolidation or Merger; Sale of Assets or Shares. This Note
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shall be paid in full, without premium, in the event (a) the Company
consolidates or merges with another entity, unless (i) the Company shall be the
surviving entity in such consolidation or merger or (ii) the other entity
controls, is under common control with or is controlled by the Company
immediately prior to the consolidation or merger whether or not the Company
shall be the surviving entity in such consolidation or merger, in which event
this Note shall remain outstanding as an obligation of the consolidated or
surviving entity, or (b) the Company consummates a sale of all or substantially
all of its assets.
4.2. Voluntary Repayment. This Note may be prepaid or called by the
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Company at any time in whole or in part at any time without penalty or premium,
but with at least five days notice to the Holder. Interest shall accrue to and
include the date on which prepayment is made. In the event all of the promissory
notes issued by the Company and 2Ksounds Corporation ("2Ksounds") pursuant to
the transactions contemplated by that certain Subscription Agreement by and
among 2Ksounds and the Company of even date herewith and all of the promissory
notes issued by the Company pursuant to the transactions contemplated by that
certain Common Stock Purchase Agreement by and among the Company, Xxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxx of even date herewith (collectively, the "Notes")
are repaid within six months of the Closing Date, the principal amount of
$__________ due under this Note shall be reduced by 10%.
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5. Required Consent. Neither of the parties hereto may modify any of the
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terms of this Note without the prior written consent of the other party.
6. Lost Documents. Upon receipt by the Company of evidence satisfactory
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to it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will make and deliver in lieu of such Note a new Note
of like tenor and unpaid principal amount and dated as of the original date of
the Note.
7. Miscellaneous.
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7.1 Assignment. The Company and the Holder hereby agree and
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acknowledge that the Holder, by the execution and delivery of Note Assignment
Form attached hereto as Exhibit B, may assign and transfer the rights and
obligations under this Note without the consent of the Company, and that upon
any such assignment, the Company shall make all payments of principal and
interest due under this Note directly to the Holder's assignee.
7.2 Benefit. This Note shall be binding upon and inure to the
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benefit of the parties hereto and their legal representatives, successors and
assigns.
7.3 Notices and Addresses. All notices, offers, acceptances and any
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other acts under this Note (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressee in person, by Federal Express
or similar receipted delivery, or, if mailed, postage prepaid, by certified
mail, return receipt requested to the addresses listed on page 1 of this Note or
to such other address as any of them, by notice to the others may designate from
time to time. Time shall be counted to, or from, as the case may be, the
delivery in person or five business days after mailing.
7.4 Governing Law. This Note and any dispute, disagreement, or
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issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
shall be governed and interpreted according to the law of the State of
California, without regard to its principles of conflicts of law.
7.5 Jurisdiction and Venue. The Company and the Holder each (i)
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agree that any legal suit, action or proceeding arising out of or relating to
this Note shall be instituted exclusively in the California State Superior
Court, County of Los Angeles or in the United States District Court for the
Central District of California, (ii) waive any objection to the venue of any
such suit, action or proceeding and the right to assert that such forum is not a
convenient forum, and (iii) irrevocably consent to the jurisdiction of the
California State Superior Court, County of Los Angeles, and the United States
District Court for the Central District of California in any such suit, action
or proceeding, and the Company further agrees to accept and acknowledge service
of any and all process which may be served in any such suit, action or
proceeding in California State Superior Court, County of Los Angeles, or in the
United States District Court for the Central District of California and agrees
that service of process upon it mailed by certified mail to its address shall be
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deemed in every respect effective service of process upon it in any such suit,
action or proceeding.
7.6 Section Headings. Section headings herein have been inserted
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for reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Note.
7.7 Survival of Representations, Warranties and Agreements. The
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representations, warranties and agreements contained herein shall survive
the delivery of this Note.
IN WITNESS WHEREOF, this Note has been executed and delivered on the date
specified above by the duly authorized representative of the Company.
BIG INTERACTIVE GROUP, LLC
By:
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Xxxx Xxxxxx
Managing Member
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