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Exhibit 2. Form of Note
THIS CONVERTIBLE SECURED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND IS A RESTRICTED SECURITY AS THAT TERM IS DEFINED IN RULE
144 UNDER THE ACT. THIS CONVERTIBLE SECURED NOTE MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE
SATISFACTION OF THE COMPANY.
CONVERTIBLE SECURED NOTE
${_____} November ____, 1998
FOR VALUE RECEIVED, Spatialight, Inc., a corporation organized and
existing under the laws of the State of New York (the "Company"), hereby
promises to pay to {_____} ("Payee") the principal sum of ${_____}, or so much
thereof as shall have been funded in accordance with the Convertible Secured
Loan Agreement dated of even date herewith, among the Company, Payee and Others
(the "Loan Agreement") on December 31, 1998 or such earlier or later date as
this Note shall become due by lapse of time, acceleration, extension or
otherwise, as provided herein (the "Maturity Date"), with interest on the
principal sum hereof, as set forth below in Paragraph 1. This Note is one of a
series of Convertible Secured Notes ("Convertible Notes") issued on the date
hereof pursuant to the Loan Agreement in an aggregate principal amount not to
exceed Two Million Dollars ($2,000,000) (the "Convertible Note Series").
1. Payment of Interest. This Note will bear interest at the rate
of six percent (6%) per annum. Interest shall be compounded quarterly. Interest
shall be payable on the Maturity Date. At the option of the Payee, any interest
due and payable hereunder, shall be paid by the issuance of such common stock of
the Company having a Market Value equal to the amount of interest due hereunder.
For purposes of the preceding sentence, the term "Market Value" shall mean the
average public trading price for such common stock for (i) the ten (10) previous
trading days, if at least five (5) trades have occurred during such ten trading
days, or if not, (ii) the previous ten (10) trades.
2. Repayment of Principal. Payment on the principal balance of
this Note will be made on the Maturity Date. The Company shall have no right to
pre-pay any portion of this Note.
3. Extension of Maturity Date.
(a) The Company, at its option, to be exercised by
written notice to the Payee given no less than ten (10) days and no more than
forty (40) days prior to December 31, 1998, may extend the Maturity Date to
December 31, 1999; provided, however, that at the time of the giving of Notice
of such extension, the following conditions have been met:
(i) In the event that the Maturity Date is
extended by the Company in accordance with this Paragraph 3, the Company shall
have paid to the Payee all interest accrued (and that will accrue) on the
principal amount outstanding hereunder from time to time, through December 31,
1998.
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(ii) On or before the date of exercise of this
option to extend the maturity date (the "Exercise Date") the Company has
developed and demonstrated a fully functioning projection display unit,
including the following components: (i) 1024 x 768 Spatial Light Modulator, (ii)
lamp; (iii) mirror; (iv) polarizer, (v) lens; (vi) screen; and (vii) projection
display case.
(iii) On or before the Exercise Date, the Company
has entered into one or more written agreements under which the Company can
reasonably be expected to generate not less than $250,000 in revenue for the
period beginning on any date after the date hereof and continuing through
December 31, 1999.
(b) In the event that the Maturity Date is extended by
the Company in accordance with this Paragraph 3, then, at the request of Lender,
Company shall retain at its expense (provided that the fees are reasonable) Xx.
Xxxxxx to conduct a comprehensive review of, and prepare a report on (the
"Report"), the defensive and offensive action plan that optimizes the future
intellectual property position of the Company.
4. Conversion Rights.
(a) Conversion. Payee may at any time and from time to
time, at Xxxxx's option, subject to the terms and conditions hereinafter set
forth, convert all or part of the unpaid principal of this Note into fully paid
and nonassessable shares of common stock, $.01 par value, of the Company (the
"Common Shares"), at the Conversion Price (as hereinafter defined in effect on
the Conversion Date (as hereinafter defined)). Accrued and unpaid interest on
this Note is not subject to conversion pursuant to this Paragraph 4. In the
event Payee converts all or any part of the unpaid principal of this Note
pursuant to this Paragraph 4, the Company shall pay to Payee in immediately
available funds or, at Payee's option, in Common Shares as provided in Paragraph
1, above, all accrued and unpaid interest to the Conversion Date (as defined
below); provided, however, that upon any partial conversion of this Note, the
Company shall pay to Payee only the accrued and unpaid interest attributable to
that portion of the principal actually converted.
(b) Conversion Price. The conversion price (the
"Conversion Price") at which Common Shares will initially be issuable upon
conversion of this Note will be seventy-five cents ($0.75) per Common Share. The
Conversion Price will be subject to adjustment as provided in Paragraph 4(f)
below.
(c) Method of Conversion. To convert, Xxxxx must
surrender this Note to the Company at any time during usual business hours at
the Company's principal office at 0-X Xxxxxxxxxx Xxxx., Xxxxxx, Xxxxxxxxxx
00000-0000 (or at such other location designated in a written notice given by
the Company to Payee), accompanied by a written conversion notice substantially
in the form attached hereto as Annex I (the "Written Conversion Notice") duly
executed by Payee or its attorney duly authorized in writing. Any such
conversion will be deemed to have been made as of the day that this Note is
surrendered, accompanied by the Written Conversion Notice, or if such date is
not a business day, the next succeeding business day (the "Conversion Date").
The rights of Payee in and to the principal of this Note so converted, when
surrendered for conversion, will cease as of the Conversion Date and Payee will
thereafter be deemed to be the record holder of the Common Shares received by
him upon conversion. Any partial conversion of this Note must be in multiples of
Twenty-Five Thousand Dollars ($25,000) principal amount unless otherwise agreed
by the Company.
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(d) Delivery of Certificates; Remainder Note. As promptly
as practicable after the Conversion Date, the Company will deliver or cause to
be delivered to Payee certificates representing the number of fully paid and
nonassessable Common Shares into which this Note has been converted. In the
event of a partial conversion, the Company will reissue a Note to Payee in the
amount of the remaining principal balance of this Note and all accrued and
unpaid interest on the remaining principal balance of the Note will remain
outstanding and will be payable in accordance with Paragraph 1 hereof.
(e) No Dividend Adjustment. No adjustments in respect to
cash dividends paid by the Company out of its earnings on the Common Shares
prior to the conversion of this Note will be made.
(f) Adjustment of Conversion Price. The Conversion Price
will be subject to adjustment from time to time as follows:
(i) Common Shares Issued at Less Than the
Effective Conversion Price. If the Company issues any Common Shares other than
Excluded Shares (as defined below) (the "Additional Common Shares") without
consideration or for a consideration per share less than the Conversion Price in
effect immediately prior to such issuance (the "Effective Conversion Price"),
the Conversion Price shall be reduced to a Price determined by multiplying the
Effective Conversion Price by a fraction (A) the numerator of which shall be the
sum of (1) the number of Common Shares outstanding immediately prior to such
issuance (including the Common Shares issuable upon the conversion of any notes
outstanding as of the date hereof to Argyle Capital Management Corporation) plus
(2) the number of Common Shares that the aggregate consideration received by the
Company for the total number of Additional Common Shares so issued would
purchase at such Effective Conversion Price and (B) the denominator of which
shall be the number of Common Shares outstanding immediately prior to such
issuance (including the Common Shares issuable upon the conversion of any notes
outstanding as of the date hereof to Argyle Capital Management Corporation) plus
the number of Additional Common Shares so issued. For purposes of this
Subparagraph 4(f), the term "Common Shares" shall mean, collectively, all Common
Shares of the Company, and any security of the Company now outstanding or
hereafter issued by the Company which is convertible or exchangeable into any
class of Common Shares.
(ii) Certain Adjustment Factors. For the purposes
of any adjustment of the Conversion Price pursuant to subparagraph (f)(i) above,
the following provisions shall be applicable:
(A) Cash. In the case of the issuance
of Common Shares for cash, the amount of the consideration received by the
Company shall be deemed to be the amount of the cash proceeds received by the
Company for such Common Shares before deducting therefrom (y) any discounts,
commissions, taxes or other expenses allowed, paid or incurred by the Company
for any underwriting or otherwise in connection with the issuance and sale
thereof and (z) any amount paid or payable for accrued interest or accrued
dividends; and
(B) Consideration Other Than Cash. In
the case of the issuance of Common Shares (other than upon the conversion of
shares of capital shares or other securities of the Company) for consideration
in whole or in part other than cash, including securities acquired in exchange
therefor (other than securities by their terms so exchangeable), the
consideration other than
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cash shall be deemed to be the fair value thereof (as determined by the Board of
Directors of the Company, whose determination shall be reasonable), irrespective
of any accounting treatment; provided that such fair value as determined by the
Board of Directors shall not exceed the aggregate Market Value of the Common
Shares being issued as of the date the Board of Directors authorizes the
issuance of such Common Shares; and
(C) Options and Convertible Securities.
In the case of the issuance of (x) options, warrants or other rights to purchase
or acquire Common Shares (whether or not exercisable immediately following such
issuance), other than 875,000 Common Shares, as equitably adjusted, to be
reserved for issuance under an equity incentive or similar plan of the Company,
(y) securities by their terms convertible into Common Shares or exchangeable for
Common Shares immediately following such issuance, or (z) options, warrants or
rights to purchase such convertible or exchangeable securities (whether or not
exercisable immediately following such issuance):
(1) the aggregate maximum
number of Common Shares deliverable upon exercise of such options, warrants or
other rights to purchase or acquire Common Shares shall be deemed to have been
issued at the time such options, warrants or other rights become exercisable and
for a consideration equal to the consideration (determined in the manner
provided in clauses (A) and (B) above), if any, received by the Company upon the
issuance of such options, warrants or other rights plus the minimum purchase
price provided in such options, warrants or other rights for the Common Shares
covered thereby;
(2) the aggregate maximum
number of Common Shares deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities, or upon the exercise of options,
warrants or other rights to purchase or acquire such convertible or exchangeable
securities and the subsequent conversion or exchange thereof, shall be deemed to
have been issued at the time such securities become convertible or exchangeable
or such options, warrants or other rights become exercisable and for a
consideration equal to the consideration, if any, received by the Company for
any such securities and related options, warrants or other rights (excluding any
cash received on account of accrued interest or accumulated dividends), plus the
additional consideration, if any, to be received by the Company upon the
conversion or exchange of such securities and the exercise of any related
options, warrants or other rights (the consideration in each case to be
determined in the manner provided in clauses (A) and (B) above);
(3) on any change in the
number of Common Shares deliverable upon exercise of any such options, warrants
or rights or conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by the Company upon
such exercise, conversion or exchange, including, but not limited to, a change
resulting from any subdivision, split-up, combination or reclassification
thereof, the Conversion Price as then in effect shall forthwith be readjusted to
such Conversion Price as would have been obtained had an adjustment been made
upon the issuance of such options, warrants or rights not exercised prior to
such change, or of such convertible or exchangeable securities not converted or
exchanged prior to such change, upon the basis of such change;
(4) on the expiration or
cancellation of any such options, warrants or other rights, or the termination
of the right to convert or exchange such convertible or exchangeable securities,
if the Conversion Price shall have been adjusted upon such becoming exercisable,
convertible or exchangeable, such Conversion Price shall forthwith he readjusted
to such
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Conversion Price as would have been obtained had an adjustment been made upon
such options, warrants or other rights becoming exercisable or securities
becoming convertible or exchangeable on the basis of the issuance of only the
number of Common Shares actually issued upon the exercise of such options,
warrants or other rights, or upon the conversion or exchange of such securities;
and
(5) if the Conversion Price
shall have been adjusted upon such options, warrants or other rights becoming
exercisable or such convertible or exchangeable securities becoming convertible
or exchangeable, no further adjustment of the Conversion Price shall be made for
the actual issuance of Common Shares upon the exercise, conversion or exchange
thereof.
(iii) Excluded Shares. "Excluded Shares" shall
mean (A) any shares issued to all holders of the Company's Common Shares
pursuant to a stock dividend, subdivision or split-up of such shares; (B)
issuances pursuant to awards granted for up to 875,000 Common Shares, as
equitably adjusted, under an equity incentive or similar plan of the Company;
(C) issuances upon the conversion of this Note or any other Convertible Note, or
any Convertible Note reissued upon conversion, in part, of the outstanding
principal on this Note or on any other Convertible Note reissued upon
conversion; (D) issuances upon the exercise of the notes, warrants or other
securities listed on Schedule 4(f)(iii).
(iv) Stock Dividends: Stock Splits, etc. If the
number of Common Shares outstanding is increased by a stock dividend payable in
Common Shares or by a subdivision or split-up of Common Shares, then immediately
after the record date fixed for the determination of holders of Common Shares
entitled to receive such stock dividend or the effective date of such
subdivision or such split-up, as the case may be, the Conversion Price shall be
appropriately adjusted so that Payee will be entitled to receive the number of
Common Shares of the Company which Payee would have owned immediately following
such action had all of the unpaid principal of this Note been converted
immediately prior thereto.
(v) Combination of Shares. If the number of
Common Shares outstanding is decreased by a combination of the outstanding
Common Shares, immediately after the effective date of such combination, the
Conversion Price shall be appropriately increased so that Payee will be entitled
to receive the number of Common Shares of the Company which Payee would have
owned immediately following such action had all of the unpaid principal of this
Note been converted immediately prior thereto.
(vi) Reorganizations, Etc. In the case of any
capital reorganization of the Company, any reclassification of Common Shares,
the consolidation of the Company with or the merger of the Company with or into
any other entity (other than a reorganization or merger solely for the purpose
of a change in the state of incorporation of the Company) or the sale, lease or
other transfer of all or substantially all of the assets of the Company to any
other person or entity, all or part of the unpaid principal of this Note will
after such capital reorganization, reclassification, consolidation, merger,
sale, lease or other transfer be convertible into the number of shares of
capital shares or other securities or property to which the Common Shares
issuable (at the time of such capital reorganization, reclassification,
consolidation, merger, sale, lease or other transfer) upon conversion of this
Note would have been entitled upon such capital reorganization,
reclassification, consolidation, merger, sale, lease or other transfer. The
subdivision or combination of Common Shares issuable upon conversion of this
Note into a greater or lesser number of Common Shares
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(whether with or without par value) shall not be deemed to be a reclassification
of the Common Shares of the Company for the purposes of this clause (vi).
(vii) Evidence of Indebtedness or Assets. In case
the Company shall declare a distribution payable in securities of any other
individual, corporation, partnership, association, trust or other entity or
organization, including any government or political subdivision or any agency or
instrumentality thereof ("Person"), evidences of indebtedness issued by the
Company or other Persons or assets (excluding cash dividends or dividends
payable solely in Common Shares) then, in each such case, Payee shall be
entitled to receive a proportionate share of any such distribution as if the
entire unpaid principal of this Note had been converted into Common Shares as of
the record date for the determination of holders entitled to receive such
distribution.
(viii) Rounding of Calculations: Minimum
Adjustment. All calculations under this subparagraph (f) shall be made to the
nearest cent or to the nearest one-hundredth (1/100th) of a share, as the case
may be. Any provision of this Paragraph 4 to the contrary notwithstanding, no
adjustment in the Conversion Price shall be made if the amount of such
adjustment would be less than one cent ($0.01), but any such amount shall be
carried forward and an adjustment with respect thereto shall be made at the time
of, and together with, any subsequent adjustment which, together with such
amount and any other amount or amounts so carried forward, shall aggregate one
cent ($0.01) or more.
(ix) Applicable Adjustment. In any case in which
two or more separate provisions of this subparagraph (f) shall require an
adjustment to the Conversion Price, the applicable adjustment shall be the
largest adjustment lowering the Conversion Price resulting from the application
of any and all appropriate provisions of this subparagraph (f) to such event.
(g) Statement Regarding Adjustments. Whenever the
Conversion Price is adjusted as herein provided, the Company shall compute the
adjusted Conversion Price in accordance with this Paragraph 4 and shall prepare
a certificate signed by the Treasurer of the Company setting forth the adjusted
Conversion Price and the facts requiring such adjustment, and such certificate
shall forthwith be delivered to Payee.
(h) Return/Cancellation. This Note, when surrendered for
conversion as herein provided in this Paragraph 4, (i) if the entire outstanding
principal balance of this Note is converted, will be canceled and no longer
deemed to be outstanding and all rights with respect to this Note will forthwith
cease and terminate, except the right of Payee to receive Common Shares in
exchange therefor, or (ii) if less than the entire outstanding principal balance
of this Note is converted, the Company will reissue a Convertible Note to Payee
in an amount equal to the remaining principal balance of this Convertible Note.
(i) Reservation of Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of its treasury
shares or its authorized but unissued Common Shares, for the purpose of
effecting the conversion of this Note, the full number of shares of Common
Shares then deliverable upon the conversion of this Note.
(j) Valid Issuance. All Common Shares that may be issued
upon conversion of this Note will upon issuance by the Company be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof, and the
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Company will take no action which will cause a contrary result (including,
without limitation, any action which would cause the Conversion Price to be less
than the par value of the Common Shares).
(k) Legends. Each certificate for Common Shares issued
upon the conversion of this Note will be stamped or otherwise imprinted with a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH.
The foregoing legend will be removed from the certificates representing Common
Shares, at the request of the holder of such shares, at such time as they become
registered under the Act or eligible for resale pursuant to Rule 144(k) under
the Act.
5. Events of Default. The following events shall be deemed an
event of default under this Note (each, an "Event of Default"):
(a) A failure in the payment of any installment of
interest or principal on this Note or any part thereof on the date the same is
due which failure continues uncured for a period of at least ten (10) days;
(b) A failure in the payment of any interest or principal
on any other obligation of the Company owed to the Senior Lenders (as such term
is defined in that certain Intercreditor Agreement of even date herewith) on the
date the same is due which failure continues uncured for a period of least ten
(10) days;
(c) The Company (i) admits in writing its inability to
pay its debts as they come due, or makes a general assignment for the benefit of
its creditors; (ii) commences any case, proceeding or other action seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeks appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property; or (iii) takes any corporate action to
authorize any of the actions set forth above in this Paragraph (5)(c);
(d) Any case, proceeding or other action against the
Company is commenced seeking to have an order for relief entered against the
Company as debtor, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of the Company or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action remains undismissed for a period of ninety (90) days;
(e) The Company breaches, in a material respect, or fails
to perform any material provision or covenant of this Note (other than the
payment of any installment of interest on this Note or any part thereof on the
date the same is due, which event is provided for in Paragraph 5(a)), which
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breach or failure to perform is not cured within fifteen (15) days of receipt of
written notice thereof from Payee to the Company;
(f) The Company breaches, in a material respect, or fails
to perform any material covenant, condition or other provision of the Loan
Agreement, or of any other Loan Document (as defined in the Loan Agreement),
which breach or failure to perform is not cured within fifteen (15) days of
receipt of written notice thereof from Payee to the Company;
(g) Any change in the Company's financial condition,
prospects or operations (including, without limitation, the continued validity
of all patents and trademarks described in Schedule 4.9(a) to the Loan
Agreement) which: (a) has or reasonably could be expected to have any material
adverse effect upon the validity or enforceability of any material provision of
this Note, the Loan Agreement, or any other Loan Document (as defined in the
Loan Agreement); (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise) or business operations of the
Company; (c) materially impairs or could reasonably be expected to materially
impair the value of any or all of the Collateral (as defined in the Security
Agreement referred to in Paragraph 7 below) or the priority of Payee's security
interest in the Collateral; or (d) materially impairs, or could reasonably be
expected to materially impair the ability of Payee to enforce any of its legal
remedies pursuant to this Note, the Loan Agreement, or any Loan Document;
(h) The death, total disability or resignation or removal
of Xxxxxx Xxxxx from the board of directors of the Corporation;
(i) The failure of the Company to commence, on or before
December 31, 1998 the process of auditing the books and records of the Company
for the year ended December 31, 1997, or deliver to the Payee on or before March
31, 1999, (i) audited consolidated financial statements of the Company
(including any related notes and schedules thereto) for the fiscal years ended
December 31, 1997, and December 31, 1998, respectively, and with respect to the
audited consolidated financial statements as of December 31, 1997, such
financial statements are not different in any materially adverse way from the
unaudited consolidated financial statements included in the Company's Annual
Report on Form 10KSB for the fiscal year ended December 31, 1997 and (ii) a
certified report by the Company's auditors detailing the capitalization of the
Company as of December 31, 1997 (including, but not limited to, the number of
Common Shares, preferred shares, options, warrants or other equity instruments
issued by the Company) as well as a verification of the Company's liabilities as
of June 30, 1998; and
(j) For any calendar quarter beginning after December 31,
1998, the Company's actual revenues are less than seventy-five percent (75%) of
the projections set forth in the Spatialight, Inc. Financial Projections dated
November 11, 1998, and previously delivered to Payee.
Upon the occurrence of an Event of Default, at the election of the
Payee, which election shall be exercised by written notice to the Company, the
entire aggregate principal amount of this Note will become immediately due and
payable, together with all accrued and unpaid interest thereon. Notwithstanding
the foregoing, upon the occurrence of an Event of Default specified in Section
5(d), the entire aggregate principal amount of this Note, together with all
accrued and unpaid interest thereon, shall immediately and without notice become
due and payable without action of any kind on Xxxxx's part.
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6. Notice of Liquidating Event; Notice of Event of Default. At
least thirty (30) days prior to any dissolution, liquidation or winding up of
the affairs of the Company, whether voluntary or involuntary, or the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property and assets of the
Company, or capital shares of the Company, or the consolidation or merger of the
Company with or into any other corporation or corporations or the consolidation
or merger of any other corporation or corporations with or into the Company
(each a "Liquidation Event"), the Company shall give written notice to Payee of
the proposed Liquidation Event. Payee, at its option, may convert this Note
effective upon the occurrence of the Liquidation Event (or such earlier date as
Payee requests), which conversion shall be subject to the Closing of the
transaction that constitutes the Liquidation Event. If Payee does not so convert
this Note, all principal under this Note, together with accrued and unpaid
interest thereon, may be prepaid in full upon the occurrence of the Liquidation
Event. The Company shall give prompt written notice to Payee of the occurrence
of any Event of Default hereunder, and of any event which with the giving of
notice or the passage of time or both would become an Event of Default
hereunder.
7. Security. The full amount of this Convertible Secured Note is
secured by certain collateral (the "Collateral") identified and described as
security therefor in the Security Agreement of even date herewith (the "Security
Agreement"), executed and delivered by the Company. The Company shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
Collateral against and take such other action is necessary to remove, any lien
on or in the Collateral, or in any portion thereof, except as permitted pursuant
to the Security Agreement.
8. Notice; Registered Form. Any notice or communication given
under this Note will be in writing and be hand delivered, mailed by registered
or certified mail, postage prepaid, delivered by facsimile (with a telephonic
confirmation or answer-back) or by overnight courier as follows:
(i) If to Payee:
{_____}
(ii) If to the Company to:
Spatialight, Inc.
0-X Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxxxx: (000) 000-0000
or at such other address as hereafter will be furnished in writing by the
addressed party to the other party. Delivery by hand will be deemed given when
personally delivered; delivery by registered or certified mail will be deemed
given three (3) business days after the same is posted; delivery by facsimile
will be deemed given when received; and delivery by overnight courier will be
deemed given the first business day following the date of timely deposit with
such courier.
9. No Recourse. No recourse will be had for the payment of
principal of, or interest on, this Note, or any part thereof, or for any claim
based thereon or otherwise in respect thereof, or for the indebtedness
represented hereby, against any shareholder, officer or director, as such, past,
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present or future of the Company, whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all liability, if any, of that character or otherwise
against every such shareholder, officer or director, being, by the purchase or
assignment of this Note, expressly waived and released.
10. Waiver: Modification in Writing. No failure or delay on the
part of Payee in exercising any right, power or remedy hereunder will operate as
a waiver thereof, nor will any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to Payee
at law, in equity or otherwise. Any provision of this Note may be waived by or
on behalf of Payee, and this Note may be amended, provided such waiver or
amendment is approved and signed by the Company and Payee.
11. Governing Law; Choice of Forum. This Note will be deemed to be
a contract made under the laws of the State of New York, and for all purposes
will be construed in accordance with the laws of said state, without regard to
principles of conflicts of law.
12. Severability of Provisions. Any provision of this Note which
is prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
13. Headings. The headings in this Note are for the convenience of
reference only and will not affect the construction of this Note.
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IN WITNESS WHEREOF, this Note is executed by a duly authorized officer
of each of the undersigned as of the date and year first above written.
SPATIALIGHT, INC.
By:
---------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
