THIS NOTE IS NEGOTIABLE AND SUBORDINATED TO ANY AND ALL DEBTS OF THE COMPANY AS
PROVIDED BELOW.
nSTOR TECHNOLOGIES, INC.
(a Delaware corporation)
10% Subordinated Note
Amount: $500,000 Dated: November 20, 2000
nSTOR TECHNOLOGIES, INC., a Delaware corporation ("Company"), for value
received, hereby promises to pay to XXXXXXXX XXXX or to her order or to such
persons as she may designate from time to time ("Holder") in lawful money of the
United States of America, upon Xxxxxx's presentation and surrender of this 10%
Subordinated Note ("Note") at the principal office of the Company: (i) the
principal sum of Five Hundred Thousand Dollars ($500,000) on January 31, 2002,
10:00 a.m., local time ("oaturity"), and (ii) interest on the unpaid principal
of this Note at the rate of ten percent (10%) per annum, payable quarterly.
At the option of the Company, any payment by the Company required
hereunder may be made by check mailed to the Holder at the last address for the
Holder appearing on the records of the Company.
1. No Avoidance. The Company shall not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities or any other
voluntary action, nor shall the Holder by any action, avoid or seek to avoid the
performance of any of the provisions of this Note.
2. Subordination. Indebtedness evidenced by this Note shall be
subordinate in interest, and in right of payment as to principal and accrued
interest, to the payment of any and all "Senior Indebtedness". "Senior
Indebtedness" shall mean: (i) all indebtedness owed to any lender, whether or
not secured, including, without limitation all indebtedness under revolving
lines of credit and term loans; (ii) all obligations to reimburse any bank or
other person in respect of amounts paid under letters of credit, acceptance or
other similar instruments; (iii) purchase money financing incurred in connection
with the purchase by the Company of goods, fixtures, equipment or inventory;
(iv) capital lease obligations; (v) liens prior in interest to this Note by
operation of law; (vi) all other indebtedness which does not provide that it is
to rank pari passu with or subordinate to this Note; and (vii) all deferrals,
renewals, extensions and refundings of, and amendments, modifications and
supplements to any of the Senior Indebtedness described above.
3. Default. In the event that the Company: (i) fails to make any
payment of principal or interest hereunder when due and such default shall
continue for thirty (30) days after written notice thereof has been delivered to
the Company; (ii) files a petition or is subject to proceedings for protection
under any bankruptcy, receivership, reorganization or insolvency laws; (iii)
makes a general assignment of all or substantially all of its assets for the
benefit of its creditors; (iv) has a trustee or receiver appointed for the
Company, its assets or a substantial portion of its assets; (v) is adjudicated
by a court of competent jurisdiction to be insolvent or bankrupt; or (vi) fails
to observe any of the covenants or agreements on the part of the Company
contained in this Note continuing (without being waived or cured) for a period
of thirty (30) days after receipt from Holder of written notice of such failure
(unless the issue of whether such failure has been cured is being contested in
good faith by the Company); then the Holder may, by written notice to the
Company, declare the outstanding principal amount of this Note to be immediately
due and payable, whereupon the outstanding principal amount hereof shall become
and be immediately due and payable, along with any accrued but unpaid interest.
4. Negotiability. This Note is negotiable. It may be sold,
assigned or transferred by the Holder without the prior written consent of the
Board of Directors of the Company. Upon the death of the Holder, the Holder's
administrator, executor, heir or legatee shall have, upon written notice to the
Company, all rights and interests of the Holder in this Note. Any sale,
assignment, transfer or succession (due to death of the Holder) shall be made in
compliance with all applicable Federal and state securities laws, and upon any
such event, the Company may issue a substitute Note in the name of the new
Holder and representing the then outstanding principal and unpaid accrued
interest.
5. Severability. In case any provision of this Note is held invalid,
illegal or unenforceable by a court of competent jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
effected or impaired thereby.
6. Choice of Law. Venue and Jurisdiction; Legal Proceedings. This
Note shall be governed by and construed in accordance with the laws of the State
of Florida, without reference to choice of law principles, and the sole
jurisdiction and venue for any claim, suit, or proceeding brought in connection
with this Note shall be Palm Beach County, Florida. In any suit, action or
proceeding arising out of or in connection with this Note, the prevailing party
shall be entitled to an award of the reasonable attorneys' fees and
disbursements incurred by such party in connection therewith.
7. Business Day. If any interest payment date, Date of Conversion
or the Maturity date under this Note shall not be a business day in the State of
Florida, payment may be made on the next succeeding day that is a business day,
and shall be deemed hereunder as made on such interest payment date, Date of
Conversion, or Maturity date, notwithstanding any other provisions contained in
this Note.
8. Notices. Unless otherwise provided herein, all demands,
notices, consents, requests and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered in person or
mailed first class, postage-paid, addressed (i) if to the Company, to the
Company's principal business office in the State of Florida, and (ii) if to the
Holder, at the last address for the Holder listed on the records of the Company.
9. Modification. This Note represents the entire understanding of
the parties hereto relating to the subject matter hereof, and supersedes any and
all other prior agreements between the parties. The terms and provisions of this
Note cannot be modified or amended orally or by course of dealing or conduct, or
in any other manner, except in a writing signed by the party against whom
enforcement is sought.
10. Binding Effect. This Note shall be binding on and inure to the
benefit of the respective parties hereto and their successors and assigns.
11. Captions. Section captions are provided for the convenience of
the parties and are not intended to affect the interpretation, performance or
enforcement of this Note.
12. Compliance With Law. It is the responsibility of the Holder to
ensure that all payments received by the Holder comply with all tax, securities
and other applicable laws, rules, and regulations of all applicable authorities,
and to provide the Company with any written consents or other documents
necessary for compliance with such laws, rules and regulations.
IN WITNESS WHEREOF, the Company has caused this Note to be signed by its
authorized officer and its corporate seal to be affixed hereto, as of this 20
day of November, 2000.
nSTOR TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ X. Xxxxx Xxxxxx
Its: Controller
