1
SECURED PROMISSORY NOTE
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$200,000 Dated: ____________, 2001
1. Principal. For value received, E-Net Xxxxxxxxx.xxx, Inc., a
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corporation and all of its subsidiary and affiliated corporations, jointly and
severally ("Maker"), promises to pay to the order of Laguna Pacific Partners,
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LP, a Delaware limited partnership ("Holder"), at 00000 Xxx Xxxxxx Xxxxxx, Xxxxx
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850; Irvine, California 92612-1008, or at such other place as Holder may
designate in writing, the principal sum of $200,000 (the "Obligation"), which
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represents the principal amount to be advanced by Holder to Maker plus all
accrued interest.
2. Interest. Interest on the unpaid principal amount of the Obligation
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outstanding shall accrue at a rate per month equal to 7% percent per annum.
Computations of interest shall be made on the basis of a 30-day month, and the
actual number of days elapsed.
3. Payments. Maker shall pay to Holder the Obligation in the following
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manner:
(a) One payment consisting of principal and interest on the Maturity Date
(as defined below).
(b) "Maturity Date" shall mean the sooner to occur of either: (1) nine
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of Maker upon the NASDAQ Small Cap market stock exchange.
4. Transaction. This Note is the Promissory Note issued by Maker to
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Holder to evidence the Obligation.
5. Prepayment. Maker shall be entitled to prepay this Note prior to
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the Maturity Date without premium or penalty, provided, however, the terms of
the related Warrant shall remain in full force and effect.
6. Applications of Payments. Payments received by Holder pursuant to
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the terms hereof shall be applied in the following manner: (1) to the payment
of all expenses, charges, late payment fees, costs and fees incurred by or
payable to Holder and for which Maker is obligated pursuant to the terms of this
Note; (2) to the payment of all interest accrued to the date of such payment;
and (3) to the payment of principal.
7. Security. As security and collateral for the Obligation, Maker
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hereby grants to Holder a continuing security interest in, and assigns to
Holder, all of Maker's interest in all of its assets. Any stock and assets held
by Holder shall be returned to Maker upon payment in full of this note. Maker
further agrees to pledge all stock issued by each of its subsidiaries by
delivering original certificates to the law offices of Xxxx, Xxxxxxx and
Xxxxxxxxx, LLP, with a blank stock power and medallion guarantee.
8. Events of Default. The occurrence of any of the following events
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shall constitute an Event of Default hereunder
(a) Failure of Maker to pay the principal and interest upon the Maturity
(b) Failure of Maker to pay any amount or perform any obligation under the
Agreement;
(c) Maker shall admit in writing his inability to, or be generally unable
to, pay his undisputed debts as such undisputed debts become due;
(d) Maker shall: (1) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee, examiner or
liquidator of all or a substantial part of his property; (2) make a
general assignment for the benefit of his creditors; (3) commence a
voluntary case under the United States Bankruptcy Code; (4) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts;
(5) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against him in an
involuntary case under the United States Bankruptcy Code; or (6) take
any action for the purpose of effecting any of the foregoing;
(e) A proceeding or case shall be commenced, without the application or
consent of Maker, in any court of competent jurisdiction, seeking: (1)
his financial reorganization, liquidation or arrangement, or the
composition or readjustment of his debts, (2) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of
Maker or of all or any substantial part of his property; or (3)
similar relief in respect of Maker under any law relating to
bankruptcy, insolvency, reorganization or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of
30 or more days; or an order for relief against Maker shall be entered
in an involuntary case under the United States Bankruptcy Code; or
(f) A final judgment or judgments issued by a court of competent
jurisdiction for the payment of money in excess of $5,000 in the
aggregate (exclusive of judgment amounts fully covered by insurance
where the insurer has admitted liability in respect of such judgment)
or in excess of $10,000 in the aggregate (regardless of insurance
coverage) shall be rendered by a one or more governmental persons
having jurisdiction against Maker and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution of the relevant judgment shall not be procured, within 30
days from the date of entry of such judgment and Maker shall not,
within that 30-day period, or such longer period during which
execution of the same shall have been stayed, appeal from and cause
the execution of such judgment to be stayed during such appeal.
9. Remedies; Late Payment Penalty; Default Interest Rate. Upon the
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occurrence of an Event of Default and without demand or notice, Holder may
declare the principal amount then outstanding of, and the accrued interest on,
the Obligation of Maker to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by Maker
and Maker may exercise all rights and remedies available to it under the
Agreement or any succeeding agreement).
10. Waiver. Maker hereby waives diligence, presentment, protest and
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demand, notice of protest, dishonor and nonpayment of this Note and expressly
agrees that, without in any way affecting the liability of Maker hereunder,
Holder may extend any maturity date or the time for payment of any installment
due hereunder, accept security, release any party liable hereunder and release
any security now or hereafter securing this Note. Maker further waives, to the
full extent permitted by law, the right to plead any and all statutes of
limitations as a defense to any demand on this Note, or on any deed of trust,
security agreement, lease assignment, guaranty or other agreement now or
hereafter securing this Note.
11. Attorneys' Fees; Costs. Maker agrees to pay to Holder all costs
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and expenses including attorneys' fees and costs, incurred by Xxxxxx in
connection with the negotiation, preparation or execution of the Loan and this
Note. If this Note is not paid when due or if any Event of Default occurs,
Maker promises to pay all costs of enforcement and collection, including but not
limited to, Xxxxxx's attorneys' fees, whether or not any action or proceeding is
brought to enforce the provisions hereof.
12. Severability. Every provision of this Note is intended to be
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severable. In the event any term or provision hereof is declared by a court of
competent jurisdiction, to be illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and
enforceable.
13. Interest Rate Limitation. Holder and Maker stipulate and agree
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that none of the terms and provisions contained herein or in the Agreement shall
ever be construed to create a contract for use, forbearance or detention of
money requiring payment of interest at a rate in excess of the maximum interest
rate permitted to be charged by the laws of the State of California. In such
event, if any Holder of this Note shall collect monies which are deemed to
constitute interest which would otherwise increase the effective interest rate
on this Note to a rate in excess of the maximum rate permitted to be charged by
the laws of the State of Delaware, all such sums deemed to constitute interest
in excess of such maximum rate shall, at the option of Holder, be credited to
the payment of the sums due hereunder or returned to Maker.
14. Number and Gender. In this Note the singular shall include the
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plural and the masculine shall include the feminine and neuter gender, and vice
versa, if the context so requires.
15. Headings. Headings at the beginning of each numbered paragraph of
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this Note are intended solely for convenience and are not to be deemed or
construed to be a part of this Note.
16. Choice of Law. This Note shall be governed by and construed in
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accordance with the laws of the State of California. Any action to enforce this
Note shall be brought in state or federal courts located in Orange County,
California.
17. Miscellaneous.
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(a) All notices and other communications provided for hereunder shall be
in writing and shall be delivered by United States mail, certified or
registered, return receipt requested to the respective party at the
address provided in the Agreement or otherwise provided for such
purpose.
(b) No failure or delay on the part of Holder or any other holder of this
Note to exercise any right, power or privilege under this Note and no
course of dealing between Maker and Holder shall impair such right,
power or privilege or operate as a waiver of any default or an
acquiescence therein, nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies herein expressly provided are cumulative to, and
not exclusive of, any rights or remedies, which Holder would otherwise
have. No notice to or demand on Maker in any case shall entitle Maker
to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of Holder to any
other or further action in any circumstances without notice or demand.
(c) Maker and any endorser 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.
(d) Maker may not assign its rights or obligations hereunder without prior
written consent of Xxxxxx. Subject to compliance with applicable
federal and state securities laws, Holder may: (1) assign all or any
portion of this Note without the prior consent of Maker; or (2) sell
or agree to sell to one or more other persons a participation in all
or any part of the Note without the prior consent of Maker. Upon
surrender of the Note, Maker shall execute and deliver one or more
substitute notes in such denominations and of a like aggregate unpaid
principal amount or other amount issued to Holder and/or to Holder's
designated transferee or transferees. Holder may furnish any
information in the possession of Holder concerning Maker, or any of
its respective subsidiaries, from time to time to assignees and
participants (including Prospective assignees and participants).
(e) It is hereby acknowledged that Xxxxxxxx X. Xxxxxxx and the law firm of
Xxxx Xxxxxxx Xxxxxxxxx, LLP have a conflict of interest in preparing
this Note. As a result, such parties are only representing the Holder
in connection with the preparation and execution of this Note. The
Maker has acknowledged that it has retained independent counsel in
connection with such representation. Maker releases Xxxxxx, Xxxxxxxx
X. Xxxxxxx and Xxxx Xxxxxxx Xxxxxxxxx, LLP from any conflicts of
interest pertaining to all documents drafted in formation of
subsidiary, Xx. Xxxxxxx, Xx. Xxxxxxx and Xxxxxx.
IN WITNESS WHEREOF, Xxxxx has caused this Note to be duly executed and
delivered to Holder as of the day and year and at the place first above written.
"MAKER"
E NET XXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Its: President & CEO
"HOLDER"
LAGUNA PACIFIC PARTNERS, LP
By: /s/ Xxxxxxxx X. Xxxxxxx By: s/ Xxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Its: President of General Partner, Its: President of General Partner,
Strawberry Canyon Capital, Inc. Manhattan Network, Inc.
