PROMISSORY NOTE
$90,000.00 MANCHESTER, NEW HAMPSHIRE
APRIL ___, 1998
FOR VALUE RECEIVED, the undersigned, PALM DESERT ART, INC. (f/k/a Database
Technologies, Inc.), a Delaware corporation, (the "Maker") hereby promises to
pay to the order of XXXXX XXXXX, or to any holder hereof, (the "Holder") on or
before [90 days] July __, 1998 (the "Maturity Date") the principal sum of Ninety
Thousand Dollars ($90,000.00), together with interest at the rate of 9% per
annum from the date hereof through the date upon which the principal balance
shall have been paid in full.
All payments by the Maker hereunder shall be applied first to accrued
interest, then to principal currently due in accordance with the terms hereof,
the balance (if any) to prepayment of principal. Interest will be calculated on
the basis of the actual number of days elapsed over a year of 365 days. The
Maker shall have the right to prepay principal at any time or from time to time
without any prepayment fee or penalty whatsoever.
This Note is the promissory note referred to in, has been issued pursuant
to and is entitled to the benefits of a certain Asset Purchase Agreement between
the Maker and Holder (the "Agreement"), a Guaranty issued by Palm Desert Art
Publishers, Ltd., a California corporation and an affiliate of the Maker, (the
"Guarantor") and a Stock Pledge Agreement of the Guarantor, all being of even
date herewith.
Events of Default.
(a) If one or more of the following described Events of Default shall occur
and be continuing, that is to say:
(i) The Maker shall default in the payment of principal of or interest
on this Note when due, and such default shall have continued for a period
of ten days;
(ii) The Maker shall default in any payment of principal of or
interest on any other obligation for borrowed money beyond any period of
grace provided with respect thereto if the effect of such default is to
cause such obligation to become due prior to its stated maturity;
(iii) Any representation or warranty made by the Maker or the
Guarantor in the Agreement or in any document or instrument delivered in
connection therewith shall prove to have been false or misleading in any
material respect as of the time made or furnished; or
(iv) The Maker or the Guarantor shall default in the observance or
performance of any other covenant, condition or provision of the
Agreement or of any document or instrument delivered in connection
therewith, and such default shall not have been remedied within 30 days
after notice thereof shall have been given to them by the Lender.then, and
in any such event, the holder of this Note shall be entitled by written,
telephonic or telegraphic notice to the Maker to declare this Note and
interest accrued hereunder and all other liabilities of the Maker hereunder
to be forthwith due and payable and the same shall thereupon become and be
due and payable without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived.
(b) If one or more of the following described Events of Default shall occur
and be continuing, that is to say:
(i) A proceeding shall have been instituted in respect of the Maker
(1) seeking the entry of an order for relief against the Maker,
or seeking a declaration that it is insolvent, or resulting in a
finding that it is insolvent, or seeking the dissolution, arrangement,
adjustment, composition or other similar relief with respect to the
Maker, its assets or its debts under any law now or hereafter in
effect relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, or
(2) seeking the appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for the
Maker or for all or any substantial part of its property,
and such proceeding results in the entry, making or grant of any such
order, finding or appointment, or such proceeding shall remain undismissed
and unstayed for a period of 30 consecutive days, or, if such proceeding is
brought under the federal bankruptcy code, the Maker fails to file a proper
answer (including a request that the petitioner post adequate bond under
Section 303(e) of said code) thereto within 10 days of receipt of notice of
said proceeding; or
(ii) the Maker shall become insolvent, shall become generally unable
to pay its debts as they become due, shall voluntarily suspend transaction
of its business, shall make a general assignment for the benefit of
creditors, shall institute a proceeding described in the foregoing
paragraph (b)(i) hereof or shall by any act indicate its consent to or
acquiescence in any proceeding or action described in said paragraph (b)(i)
hereof (whether or not such proceeding is actually instituted or diligently
prosecuted), or shall dissolve, wind-up or liquidate itself, or shall take
any action in furtherance of any of the foregoing,
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then, and in any such event, this Note and interest accrued hereunder and all
other liabilities of the Maker hereunder shall thereupon become and be forthwith
due and payable without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived.
General Provisions.
In the event this Note shall have been declared or shall have become due
and payable, the Holder shall have the right, in addition to all other rights
and remedies available to it, without notice to the Maker, to set off against
and to appropriate and apply to the then unpaid balance of this Note any debt
owing to, and any other funds held in any manner for the account of, the Maker
by the Holder. Such right shall exist whether or not the Holder shall have made
any demand hereunder, whether or not any such debt owing to or funds held for
the account of the Maker is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guaranty or any other security, right
or remedy available to the Holder.
In the event the Holder is at any time required to turn over, disgorge or
repay (whether to the Maker, a trustee in Bankruptcy, or to third parties) any
payment previously received by the Holder with respect to this Note (whether
received from the Maker or third parties), then the amount of the liabilities of
the Maker hereunder shall be increased by the amount so turned over or disgorged
by the Holder, plus reasonable expenses incurred by the Holder in the process,
to the same extent as if the amount and expenses in question had been advanced
by the Holder at the inception of this Note and had remained unpaid since that
date, all of which shall be payable immediately, without further demand.
No delay or omission on the part of the Holder in exercising any right
hereunder shall operate as a waiver of such right, or of any other right, nor
shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion. No single or
partial exercise of any right, power or privilege hereunder shall preclude other
exercises thereof, or the exercise of any other power hereunder.
The Maker hereby unconditionally waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note.
In case a suit or action is instituted to collect this Note or any portion
hereof, the Maker shall pay, in addition to costs and disbursements allowed by
law, such sum as the court may judge reasonable as attorneys' fees in such suit
or action.
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This Note is intended to take effect as a sealed instrument. The rights,
obligations and duties of the parties hereunder shall be construed in accordance
with and be governed by the laws of the State of New Hampshire. The Maker hereby
agrees that any action hereon or relating hereto may be maintained in a court of
competent subject-matter jurisdiction located in the State of New Hampshire, and
consents to the jurisdiction of any such court for all purposes connected
herewith.
This Note is fully negotiable, and upon negotiation may be enforced by the
Holder in accordance with its terms. The rights, obligations and duties of the
Maker hereunder shall not be assigned or delegated.
IN WITNESS WHEREOF, the Maker has executed and delivered this Note on the
day and year first written above.
PALM DESERT ART, INC.
By: ss/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
Title: President
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STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
On April 24, 1998 before me, Xxxxxxxx X. Xxxxxxx "Notary Public" personally
appeared Xxxx Xxxx Xxxx personally known to me
to be the person whose name is
subscribed to the within instrument and
acknowledged to me that he executed the
same in his authorized capacity and that
by his signature on the instrument the
person or the entity upon behalf of
which the person acted, executed the
instrument.
WITNESS my hand and official seal.
ss/Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxx
[SEAL] Comm. #1152975
Notary Public-California
Riverside County
My Comm. Exp.Aug. 24, 2001
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