EXHIBIT 4.2
NOTE
$500,000.00 November 23, 2004
FOR VALUE RECEIVED, the undersigned, Highgate House, LLC, a Minnesota
limited liability company ("Maker"), promise to pay to the order of Incode
Corporation, a Delaware corporation (the "Company"), at its principal office, or
at such other place as may be designated in writing by the holders of this
Promissory Note ("Note"), the principal sum of FIVE HUNDRED THOUSAND AND 00/100
DOLLARS ($500,000.00) (the "Principal Sum"), which Principal Sum shall not
accrue any interest, pursuant to the terms of this Note.
This Note is issued pursuant to and is subject to the terms of the
Convertible Debenture Purchase Agreement (the "Purchase Agreement") between
Maker and the Company of even date herewith. All defined terms herein not
otherwise defined herein shall have the meanings given such terms in the
Purchase Agreement. If the Company merges with a subsidiary of BIB Holdings,
Ltd., a Nevada corporation ("BIBO"), this Note shall be payable to BIBO
immediately and upon the completion of such merger, all references to "Company"
herein shall be deemed to refer to BIBO and all references to "Common Stock"
shall be deemed to refer to the common stock of BIBO.
Notwithstanding anything contained herein, in the Debentures, or in the
Purchase Agreement to the contrary, the Debenture B shall not accrue interest,
shall not be convertible and shall not be subject to repayment by the Company or
BIBO, as the case may be, at its maturity, and this Note shall not be due and
payable and shall not be deemed part of the "Purchase Price" for purposes of
Section 4.25 of the Purchase Agreement, unless and until:
(i) upon the effectiveness of the increase in the authorized
common stock of BIBO from 300,000,000 to 2,000,000,000
enumerated on Schedule 14C pursuant to Section 14c-2(b) of the
Exchange Act;
(ii) upon execution of a security agreement acceptable to the
Purchaser and Cornell Capital Partners, LP ("Cornell"), in
their sole discretion, pledging the common stock of Veridium
Corporation to the Purchaser and Cornell; and
(iii) the number of Escrow Shares for the aggregate principal
amount of the Debentures then outstanding, Debenture B is at
least 150% of the number of shares of Common Stock that would
be needed to satisfy full conversion of all of such
unconverted Debentures,
provided, however, that if subparagraphs (i) and (ii) are
satisfied and subparagraph (iIi) is not satisfied, the Company
or BIBO, as the case may be, shall increase in accordance with
and subject to the provisions of Section 4.14 of the Purchase
Agreement the number of Escrow Shares to cover 150% of the
number of shares of Common Stock that would be needed to
satisfy full conversion of all of such Debentures; provided,
further, that, notwithstanding the foregoing, the Debenture B
shall not accrue interest, shall not be convertible and shall
not be subject to repayment by the Company or BIBO, as the
case may be, at its maturity, and this Note shall not be
deemed part of the "Purchase Price" for purposes of Section
4.25 of the Purchase Agreement, unless and until this Note is
paid in full by the Maker or its successors and assigns,
provided, further, that seventy five (75) days after the date
hereof all references to "150%" in this paragraph shall be
"500%"; provided, further, that if a reverse stock split or
forward stock split of the common stock of BIBO occurs, "150%"
or "500%", as the case may be, in this paragraph shall be
"2,000%".
If this Note has not been paid in full by the Maker to the Company or
BIBO, as the case may be, (whether or not it is otherwise then due or payable by
its terms) (i) any payments from the Company or BIBO, as the case may be, to the
Maker pursuant to Sections 4.19 and 4.31 of the Purchase Agreement will be
offset by the principal amount of this Note and (ii) "Debentures" shall
specifically refer to Debenture A and Debenture B in Sections 4.19 and 4.31 of
the Purchase Agreement.
Upon payment of this Note in full in cash or by wire transfer of legal
tender in the United States, the Escrow Agent shall deliver the Debenture B to
Maker and the Fixed Conversion Price with respect to the Debenture B shall be
125% of the Fixed Conversion Price (as defined in Debenture A). Upon the earlier
of payment of this Note or automatic expiration of this Note, the Company shall
deliver this Note to Maker. Upon automatic expiration of this Note, the Escrow
Agent shall return to the Company the Debenture B.
Notwithstanding anything to the contrary contained herein or in the
Purchase Agreement or the other Transaction Documents, this Note and all
payments due hereunder shall automatically expire, be of no further force or
effect and shall become null and void after two (2) years from the date hereof.
If this Note becomes due or payable on a Saturday, Sunday or public
holiday under the laws of the State of New York, the due date hereof shall be
extended to the next succeeding business day.
This Note may not be modified orally, and shall be governed, construed
and interpreted under the internal laws of the State of New York without
reference to principles of conflicts or choice of law.
Any action to enforce the terms of the Note shall be brought
exclusively in the state and/or federal courts situated in the County and State
of New York. Service of process in any action by the Company to enforce the
terms of the Note may be made by serving a copy of the summons and complaint, in
addition to any other relevant documents, by commercial overnight courier to the
Maker at its principal address set forth in the Purchase Agreement.
IN WITNESS WHEREOF, this instrument is executed as of the date first hereinabove
set forth.
Highgate House, LLC
By: HH Advisors, LLC, its managing member
By: Xxxxxxx Investment Group, Inc., its
managing member
By:
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Name:
Title: President
ACCEPTED AND AGREED TO:
Incode Corporation
By: /S/ Xxx Xxxxxxx
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Xxx Xxxxxxx, President
