SECURED PROMISSORY NOTE
Exhibit
10.2
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Principal
Amount: _________
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Date
Made: October 17,
2007
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(subject
to adjustment as stated below)
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Los
Angeles, California
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FOR
VALUE RECEIVED,
the undersigned, Fluid Media Networks, Inc., a Nevada corporation
(“Borrower”), promises to pay to the order of _________
(“Lender”), at Los Angeles, California, or at such other place as Lender
may from time to time designate by written notice to Borrower in accordance
with
this secured promissory note (the “Note”), in lawful money of the United
States of America, in the manner and at the rate provided herein, the principal
sum of ________ Dollars ($_____) (the “Principal Amount”) (subject to
adjustment as provided below), on or prior to October 16, 2009 (such date,
the
“Maturity Date”). This Note is being made concurrently with
and pursuant to the Stock Purchase Agreement, of even date herewith (the
“Stock Purchase Agreement”), by and among Borrower, pursuant to which
Borrower is purchasing one hundred percent (100%) of the issued and outstanding
shares of capital stock of Trusonic, Inc. (“Company”) from the stockholders of
Company. Except as otherwise expressly set forth herein, defined
terms shall have such meanings ascribed to them in the Stock Purchase
Agreement. Xxxxxxxx further agrees as follows:
Article
1. Adjustments. Borrower
shall have the right to set-off, upon prior written notice to Lender specifying
in reasonable detail the basis for such set-off, against any amount due
hereunder, the amount of any claim for indemnification or payment of damages
from Lender to which Borrower may be entitled under the Stock Purchase
Agreement, as provided in Section 6.05 thereof. If it is ultimately determined
pursuant to the Stock Purchase Agreement that Lender is entitled to all or
a
portion of such amount, then such amount shall be paid promptly to Lender,
together with interest thereon at the interest rate provided herein from
the
date such amount was disputed through the date of payment.
Article
2. Interest;
Payments.
(a) This
Note shall accrue simple interest at the rate of seven percent (7%) per
annum.
(b) This
Note shall be payable in two (2) payments, as follows: (a) one
payment of _________ Dollars ($_____), representing principal and
accrued interest (the “First Installment”), payable one (1) year from the date
of this Note (the “First Installment Payment Date”), and (b) the remaining
principal, together with all accrued interest (the “Second Installment”), in the
amount of ________ Dollars ($____), shall be payable on the Maturity
Date.
(c) This Note
shall be payable by certified or bank cashier’s check or by wire transfer of
immediately available funds to an account designated by Xxxxxx in
writing.
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of 4
Article
3. Security
Interest. Simultaneous with the making of this Note,
Lender shall be granted a security interest (the “Security Interest”), in
and to all of the assets of Lender and the Company pursuant to the terms
and
conditions of a security agreement, dated as of even date hereof (the
“Security Agreement”). The Security Interest shall continue to
secure this Note until this Note has been paid in full or is otherwise satisfied
in accordance with the terms hereof.
Article
4. Default.
(a) It
shall be an event of default (“Event of Default”): (i) upon the failure
by Borrower to pay the First Installment on or before the First Installment
Payment Date (subject to a ten (10) day grace period during which Borrower
may
cure any such failure to
pay); providedhowever, that Xxxxxxxx’s
failure to pay the First Installment while there exists any dispute as to
the
amount to be paid hereunder as provided in Article 1 of this Note shall not
be
deemed an Event of Default (ii) upon the failure by Borrower to pay the Second
Installment on or before the Maturity Date (subject to a ten (10) day grace
period during which Borrower may cure any such failure to
pay); providedhowever, that Xxxxxxxx’s
failure to pay the Second Installment while there exists any dispute as to
the
amount to be paid hereunder as provided in Article 1 of this Note shall not
be
deemed an Event of Default; (iii) upon the breach or failure by Borrower
to
perform any material warranty, covenant or undertaking of Borrower in this
Note
(except with respect to the payment of principal or interest, which is addressed
in clause (i) and/or clause (ii) of this subsection (a)), and each of such
breach or failure to perform is not cured within thirty (30) days following
the
receipt by Borrower of written notice thereof by Lender; (iv) upon the material
breach or default of any covenant or obligation of Borrower under the Stock
Purchase Agreement or of Borrower or the Company under the Security Agreement;
or (v) in the event that Borrower shall (A) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of all or substantially all of its property, (B) make a general
assignment for the benefit of creditors, (C) admit in writing its inability
to
pay its debts as they become due, (D) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in effect), (E) be adjudicated
as bankrupt or insolvent, (F) file a petition or take advantage of any other
law
providing for the relief of debtors, or (G) acquiesce to, or fail to have
dismissed within forty-five (45) days, any petition filed against it in any
involuntary case under such bankruptcy law.
(b) Upon
the occurrence of an Event of Default, interest shall accrue on the principal
amount due under this Note at the rate of ten percent (10%) per annum and
Lender
will have the option, by written notice to Xxxxxxxx, to declare the entire
balance of principal hereunder together with all accrued and unpaid interest
thereon immediately due and payable and to exercise all rights and remedies
available to it. No delay or omission on the part of Lender hereof in
exercising any right under this Note or otherwise shall operate as a waiver
of
such right.
Article
5. Waivers.
(a) Borrower
waives demand, presentment, protest, notice of protest, notice of dishonor,
and
all other notices or demands of any kind or nature with respect to this Note,
together with diligence in collecting and the bringing of suit against
Xxxxxxxx.
(b) Xxxxxxxx
agrees that a waiver of rights under this Note shall not be deemed to be
made by
Lender unless such waiver shall be in writing, duly signed by Xxxxxx, and
each
such waiver, if any, shall apply only with respect to the specific instance
involved and shall in no way impair the rights of Lender or the obligations
of
Borrower in any other respect at any other time. No notice to or
demand on Borrower will be deemed to be a waiver of any obligation of Borrower
or of the right of Lender to take further action without notice or demand
as
provided in this Note.
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of 4
Article
6. Assignment
of Note. This Note and each of the provisions hereof
shall be binding upon each of the successors and assigns of
Xxxxxxxx. Borrower may not assign or transfer this Note or any of its
obligations under this Note, without the prior written consent of Lender,
which
consent shall not be unreasonably withheld.
Article
7. Jurisdiction
and Service of Process. Any controversy, dispute or
claim of any nature whatsoever arising out of, in connection with or in relation
to Note or the transaction contemplated herein will be resolved by final
and
binding arbitration in accordance with the Streamlined Rules of and by a
retired
judge at JAMS, Inc. in Los Angeles and all parties hereto consent to the
personal jurisdiction of the State of California for such arbitration and
enforcement of any award by JAMS. The prevailing party in any dispute
will be entitled to recover all reasonable attorney’s fees, costs and expenses
in addition to other allowable costs. Xxxxxx further agrees that
service of any process, summons, notice or document by U.S. registered mail
to
its respective address set forth in Section 8(d) shall be effective service
of
process for any action or proceeding brought against it in any such
arbitration.
Article
8. Miscellaneous.
(a) This
Note may be altered only by written agreement signed by the party against
whom
enforcement of any waiver, change, modification, or discharge is
sought. This Note may not be modified by an oral agreement, even if
supported by new consideration.
(b) This
Note is made and delivered in Los Angeles, California, shall be governed
by, and
construed in accordance with, the laws of the State of California, without
giving effect to such state’s principles of conflict of laws, and shall not be
construed strictly against the drafter hereof.
(c) This
Note constitutes a final written expression of all the terms of the agreement
between the parties regarding the subject matter hereof, is a complete and
exclusive statement of those terms, and supersedes all prior and contemporaneous
agreements, understandings, and representations between the
parties. If any provision or any word, term, clause, or other part of
any provision of this Note shall be invalid for any reason, the same shall
be
ineffective, but the remainder of this Note shall not be affected and shall
remain in full force and effect.
(d) Any
notice or other communication required or permitted to be given hereunder
shall
be in writing and shall be mailed by certified mail, return receipt requested
(or by the most nearly comparable method if mailed from or to a location
outside
of the United States of America) or by Federal Express, Express Mail, or
mail
nationally recognized overnight delivery or courier service, or delivered
in
person or by facsimile, or similar telecommunications equipment, against
receipt
therefore at the address of such party set forth in this subsection 8(d)
(or to
such other address as the party shall have furnished in writing in accordance
with the provisions of this subsection 8(d)).
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Lender:
Borrower: Fluid
Media Networks, Inc.
0000
Xxxxxxxx Xxx, Xxxx
#X
Culver
City, CA
90230-6607
Attention:
Facsimile:
Such
addresses may be changed by notice given as provided in this
subsection. Notices shall be effective upon the date of receipt;
provided, however, that a notice sent via telecopier shall be deemed effective
upon the date indicated on proof of transmittal; notice sent via overnight
delivery shall be deemed effective two (2) business days after deposit with
such
delivery service; and notice sent by U.S. certified mail shall be deemed
effective five (5) business days after deposit with the U.S. mail.
(e) This
Note is transferable only upon surrender of this Note for registration of
the
transfer, duly endorsed, or accompanied by a written instrument of transfer
duly
executed, by Xxxxxx or their attorney duly authorized in writing.
(f) This
Note is issued by Borrower in consideration for the purchase of the shares
of
capital stock of Company pursuant to the Stock Purchase Agreement.
IN
WITNESS WHEREOF,
Xxxxxxxx has executed this Note effective as of the date first set forth
above.
BORROWER
By:
__________________________________
Name: _______________________________
Title: ________________________________
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