Exhibit 4.2
PROMISSORY NOTE
PHOENIX, ARIZONA
$___________ _______ __, 2002
THIS NOTE IS ONE IN A SERIES OF PROMISSORY NOTES ("NOTE(S)") ISSUED
PURSUANT TO THE TERMS OF AN OFFERING OF COLLATERALIZED DEBT INSTRUMENTS AND THAT
CERTAIN SECURITY AGREEMENT AND APPOINTMENT OF AGENT FOR HOLDERS, DATED _________
__, 2002 (THE "SECURITY AGREEMENT"), THAT THE PARTIES EXPECT MAY AGGREGATE THE
PRINCIPAL AMOUNT OF $1,100,000.00. ALL CAPITALIZED TERMS HEREIN HAVE THE SAME
MEANING AS STATED OR PROVIDED IN THE SECURITY AGREEMENT.
FOR VALUE RECEIVED, the undersigned (the "MAKER") hereby promises to pay to
the order of _____________________________________________ ("LENDER"), at
Phoenix, Arizona or at such other place, or to such other party or parties as
the holder of this Note may from time to time designate, the principal sum of
______________________________ ($___________) together with interest on the
unpaid principal balance from the date the funds are advanced (the "FUNDING
DATE"), at the rate of six percent (6%) per annum (the "STATED RATE"), in the
following manner: (1) six (6) equal quarterly payments of interest only
beginning on May 1, 2002; (2) thereafter, twelve (12) equal quarterly payments
of principal and interest based upon a seven (7) year amortization of the
principal; and then (3) a final balloon payment of all remaining principal and
interest then due on May 1, 2008 (the "LOAN MATURITY"). Interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
All amounts are payable in lawful money of the United States. Interest shall
accrue at the Stated Rate beginning on the Funding Date.
1. SECURITY.
This Note is secured by collateral pursuant to the Security Agreement and a
UCC-1 Financing Statement. Such instruments and documents, together with any
other instruments and documents evidencing or securing the indebtedness
evidenced by this Note, are referred to herein as the "SECURITY DOCUMENTS."
2. EVENTS OF DEFAULT AND LENDER'S REMEDIES.
The occurrence of any one or more of the following events shall constitute
an "EVENT OF DEFAULT" hereunder:
(A) Nonpayment of principal, interest or any other amount when due under
this Note;
(B) Failure to perform any duty or obligation of Maker or to pay any sum
due or otherwise advanced under any Security Document or any other default by
Maker thereunder;
(C) The conversion of the Bankruptcy Case to a case under Chapter 7 of the
Bankruptcy Code;
(D) The appointment, at any time during the Bankruptcy Case, of a trustee,
pursuant to 11 U.S.C.ss.1104; or
(E) The occurrence of any of the Events of Default set forth in the
Security Agreement.
Upon the occurrence of an Event of Default hereunder, Agent for Lender,
pursuant to the terms and in accordance with the procedures set forth in the
Security Agreement, shall provide to Maker a written Notice of Default at the
address set forth herein and provide to Maker a period of ten (10) business days
from the date of the Notice of Default in order to cure all defaults under this
Note and/or any of the other Loan Documents. If any such defaults remain uncured
as of the close of business on the tenth business day following the date of the
Notice of Default, the Agent for Lender may, pursuant to the terms and in
accordance with the procedures set forth in the Security Agreement, exercise any
of the rights and remedies contained in the Security Agreement.
All payments on this Note shall be applied in the manner set forth in the
Security Agreement.
3. TIME OF THE ESSENCE.
Time is of the essence of this Direct Offering Note.
4. GOVERNING LAW AND JURISDICTION.
The enforcement, performance, discharge, lack of performance and formation
of this Agreement shall be governed by, and construed and enforced in accordance
with, the law of the State of Arizona, regardless of any applicable
conflict-of-law rules to the contrary.
The parties hereby:
(i) irrevocably submit to the jurisdiction of the Superior Court of
Maricopa County, State of Arizona, or any successor to said court, and to the
jurisdiction of the United States Bankruptcy Court for the District of Arizona,
or any successor to said court (hereinafter referred to as the "ARIZONA COURTS")
for purposes of any suit, action or other proceeding which relates to the
transactions contemplated in this Agreement;
(ii) to the extent permitted by applicable law, waive and agree not to
assert by way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim that they are not subject to the jurisdiction of the
Arizona Courts; that the suit, action or proceeding is brought in an
inconvenient forum; that the venue of the suit, action or proceeding is
improper; or that this Agreement or any transaction provided for herein may not
be enforced in or by the Arizona Courts; and
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(iii) agree not to seek, and hereby waive, any collateral review by
any other court, which may be called upon to enforce the judgment or any of the
Arizona Courts, of the merits of any such suit, action or proceeding or the
jurisdiction of said Arizona Court.
IN WITNESS WHEREOF, this Promissory Note has been executed as of the date
first written above.
MAKER:
EBIZ ENTERPRISES, INC.
XXXXX BUSINESS SYSTEMS, INC.
By
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Xxxxx Xxxxxxx
Its: President
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this ______ day of
__________________, 2002, by Xxxxx Xxxxxxx, the President of EBIZ Enterprises,
Inc., and Xxxxx Business Systems, Inc.
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Notary Public
My Commission Expires:
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