New York, New York $
August 11, 2000
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned Global iTechnology, Inc., a
Delaware Corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Borrower"), promises to pay____________, residing at
_______________________________ ("Lender"), the unpaid amount of principal set
forth above, with interest at the Interest Rate (as hereinafter defined) on the
unpaid principal amount from the date hereof until the said principal amount has
been paid in full, whether at the Maturity Date (as hereinafter defined) or
otherwise, all as more fully set forth herein.
This Note is given by Borrower to Lender pursuant to and is entitled to
the benefits of the Pledge, Escrow and Security Agreement between the parties
hereto of even date herewith (the "Loan Agreement"), to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Loan evidenced hereby is made and is to be repaid. Capitalized terms
not defined herein shall have the meaning set forth in the Loan Agreement. This
Note is secured by a lien and security interest in certain of ▇▇▇▇▇▇▇▇'s assets
granted by ▇▇▇▇▇▇▇▇ to Lender, more fully described in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of the Note
or the Loan Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the time and in the currency herein prescribed.
The "Interest Rate" shall be eight percent (8%) per annum, until the
principal amount of this Note, together with all unpaid accrued interest,
thereon, shall have been paid in full; provided, however, that in no event shall
the Interest Rate exceed the maximum rate or amount permitted by applicable law.
Accrued interest shall be computed on the basis of a 365 day year for the actual
number of days elapsed during the period for which computed and shall be paid by
Borrower to Lender together when principal payments are due. Each payment of
principal and interest shall first be applied to accrued interest due hereunder
and the balance, if any, to the principal hereof.
The "Maturity Date" shall be the date that is the earlier of August 10,
2001, or the date that the entire principal amount and interest on this Note
shall become due and payable by reason of acceleration due to the occurrence of
an Event of Default (as hereinafter defined) or otherwise. Borrower shall have
the right, at any time, to prepay the principal, in whole or in part, without
premium or penalty, upon at least three Business Days irrevocable notice to
Lender specifying (i) the amount to be prepaid and (ii) the date of such
prepayment. If any such notice is given, Borrower shall make the prepayment
specified therein, and such prepayment shall be due and payable as specified
therein. The Borrower will prepay the entire principal balance in the
event it receives proceeds of an equity financing or financing exceeding
$1,000,000 on the second business day following the date the Borrower completes
a financing ("Mandatory Prepayments"). Concurrently with each Mandatory
Prepayment, the Borrower will pay interest (whether or not capitalized)
associated with such Mandatory Prepayment.
EVENTS OF DEFAULT. Each of the following specified events hereby constitutes and
is herein referred to individually as an "Event of Default":
(a) Borrower's failure to make or cause to be made any payments to
Lender under this Note or under any other note or agreement now existing or
hereafter to be entered into between the undersigned and Lender when the same
are due; or
(b) Default in the due and timely observance or performance of the
covenants, conditions or agreements of Borrower contained in this Note or in any
other of the Loan Documents relating to the Collateral; or
(c) If any financial statement or representation or warranty made by
Borrower in connection with this transaction or in any document in connection
with the instruments, documents and assignments to be executed by Borrower
hereunder or pursuant hereto shall be untrue in any material respect on the date
made; or
(d) Default of any party thereto in the observance or performance by
such party of any material term, covenant, condition, warranty or representation
made or agreed to in any of the Loan Documents; or
(e) Suspension by Borrower of its business operations; or
(f) If any warrant of attachment, execution of other writ shall be
issued or levied upon the proceeds or amounts payable pursuant to the Loan
Agreement and such attachment, execution or other writ shall remain undischarged
and unstayed for a period in excess of thirty (30) days; or
(g) If Borrower should become insolvent; or should be unable to pay its
debts as they mature (including failure to pay the Loan); or should make an
assignment for the benefit of creditors or to an agent authorized to liquidate
any substantial amount of its properties or assets; or should file a voluntary
petition in bankruptcy or seeking reorganization or to effect a plan or other
arrangement with creditors; or should file an answer admitting the jurisdiction
of any court and the material allegations of an involuntary petition filed
pursuant to any legislation or governmental regulation relating to bankruptcy or
organization; or should join in any petition for an adjudication or for a
reorganization or other arrangement; or should become or be adjudicated a
bankrupt; or should apply for a consent to the appointment of or consent that an
order be made appointing any receiver or trustee for itself or for any of its
properties, assets or business; or if an order should be entered pursuant to any
legislation or governmental rule relating to bankruptcy or reorganization; or if
a receiver or a trustee should be appointed otherwise than upon its own
application or consent for all or a substantial part of its properties, assets
or business and any such receiver or trustee so appointed is not discharged
within thirty (30) days after the date of
such appointment.
Upon the occurrence of an "Event of Default", the entire principal sum
and accrued interest shall, upon written or telephonic notice by ▇▇▇▇▇▇ to
Borrower, thereupon become due and payable at the option of the Lender. Failure
to exercise this option shall not constitute a waiver of the right to exercise
the same in the event of any subsequent default.
Nothing herein will be deemed to limit or restrict any of Lender's
rights under the Loan Agreement in the event of a default by Borrower
thereunder, including, without limitation, ▇▇▇▇▇▇'s rights to deal with or
realize upon the collateral as specified herein or therein.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America by, at the option of the
Borrower, wired to the bank account of Lender or in same day funds at Lender's
office set forth above, or at such place as shall be designated by Lender in
writing pursuant to the Loan Agreement for such purpose. Until notified in
writing of the transfer of this Note, Borrower shall be entitled to deem Lender
or such person who has been so identified by the transferor in writing to
Borrower as the holder of this Note as the owner and holder of this Note. Each
of Lender and any subsequent holder of this Note agrees that before disposing of
this Note or any part hereof it will make a notation hereon of all principal and
interest payments made hereunder.
All notices and other communications given hereunder shall be given as
set forth in the Loan Agreement.
Borrower consents to any extension of time of payment hereof, release
of all or any part of the security, or release of any party liable for this
obligation. Any such extension or release may be made without notice to Borrower
and without discharging its liability.
All parties to this Note, whether Borrower, principal, surety,
guarantor or endorser, hereby waive presentment for payment, demand, protest,
notice of protest, notice of dishonor and all other notices in connection with
this Note, except Borrower does not waive notice as to any prejudgment
attachment.
▇▇▇▇▇▇▇▇ agrees that all disputes arising, directly or indirectly, out
of or relating to this Note and all actions to enforce this Note may be dealt
with and adjudicated exclusively in the state courts of New York or the federal
courts sitting in the Eastern or Southern Districts of New York, and hereby
expressly and irrevocably submits the person to the jurisdiction of such courts
in any suit, action or proceeding arising, directly or indirectly, out of or
relating to this Note or in any action to enforce this Note. So far as is
permitted under the applicable law, this consent to personal jurisdiction shall
be self-operative and no further instrument or action, other than service of
process in one of the manners specified herein or as otherwise permitted by law,
shall be necessary in order to confer jurisdiction upon the person of the
Borrower in any such court.
Provided that service is effected upon Borrower in one of the manners
hereafter specified in this Note or as otherwise permitted by law, Borrower
irrevocably waives, by way of motion, as a defense or otherwise (i) any
objection which it may have or may hereafter have to the laying
of the venue of any such suit, action or proceeding brought in such a court as
is mentioned in the previous paragraph; (ii) any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum; or (iii) any claim that it is not personally subject to the jurisdiction
of the above-named courts; provided that if service of process is effected upon
Borrower in one of the manners specified in this paragraph or as otherwise
permitted by law, ▇▇▇▇▇▇▇▇ agrees that final judgment from which ▇▇▇▇▇▇▇▇ has
not or may not appeal or further appeal in any such suit, action or proceeding
brought in such court of competent jurisdiction shall be conclusive and binding
upon Borrower and, may so far as is permitted under the applicable law, be
enforced in the courts of any state or any federal court and in any other courts
to the jurisdiction of which Borrower is subject, by a suit upon such judgment
and that Borrower will not assert any defense, counterclaim, or set off in any
such suit upon such judgment.
▇▇▇▇▇▇▇▇ promises to pay all costs and expenses, including reasonable
attorney's fees, incurred in the collection and enforcement of this Note.
Borrower and endorsers of this Note hereby consent to renewals and extensions of
time at or after the Maturity Date hereof, without notice, and hereby waive
diligence, presentment, protest, demand and notice of every kind and, to the
full extend permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
This Note is governed by the laws of the State of New York excluding
any laws relating to the conflict or choice of laws.
If any term or provision of this Note or the application thereof to any
persons or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Note or the application of such term or provision to persons
or circumstances other than those as to which it is held or unenforceable shall
not be affected thereby, and each term and provision of this Note shall be valid
and enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and the place
above written.
GLOBAL iTECHNOLOGY, INC.
By:___________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, CFO