THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OFFERED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
STAR E MEDIA CORP.
SECURED PROMISSORY NOTE
$230,000.00 DECEMBER 27, 2002
-----------
(PRINCIPAL)
1. AGREEMENT TO PAY.
-------------------
FOR VALUE RECEIVED Star E Media Corp., a Nevada corporation
(hereinafter referred to from time-to-time as "STRE" or "Borrower")
unconditionally promises to pay to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Payee") as agent for the
lenders listed on Schedule A attached hereto (hereinafter referred to as
"Lender" or "Lenders"), at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (or at such other address as Payee may, from time to time, designate in
writing) the amount of $230,000 or such lesser amount as may be outstanding
hereunder, on June 27, 2003 (Maturity Date) plus (a) commencing immediately,
interest at the rate of 6% per annum, calculated on the basis of a year of 365
days, until the earlier of the Maturity Date or acceleration (in the event of
default) of this Note; and thereafter at the rate of 35% per annum (retroactive
to December 27, 2002).
Borrower shall have the right to extend the Maturity Date for one (1)
sixty-day (60) period in the event Bathgate Capital Partners, LLC, as Placement
Agent, has not produced at least $1,000,000 in financing by the Maturity Date.
Borrower shall notify Payee in writing within five (5) days following the
Maturity Date that it has exercised its right to such sixty-day (60) extension.
THIS NOTE MAY BE PREPAID IN WHOLE OR IN PART AT ANY TIME WITHOUT PENALTY.
2. SECURITY
--------
Payment of all amounts due under this Note is secured by all assets of
the Borrower, including without limitation: (a) all accounts, contracts,
contract rights, general intangibles, including but not limited to
multi-language, bilingual localization of licensed titles and content; and (b)
all cash and non-cash proceeds of all of the foregoing (including insurance
proceeds). This security interest is subject to the terms of a Security
Agreement dated the date hereof between Borrower and Payee, the terms of which
are incorporated herein and made a part hereof.
3. EVENTS OF DEFAULT.
--------------------
The occurrence of any one of the following events shall constitute an
"Event of Default."
A. Failure of Borrower to pay principal and/or interest on the Maturity
Date or any extension thereof.
B. The Borrower makes an assignment for the benefit of creditors.
C. The Borrower files a petition(s) in bankruptcy or is adjudicated
bankrupt or insolvent, or files a petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the present or any future applicable federal, state or other
statute or law.
D. The Borrower seeks or consents to or acquiesces in the appointment
of a trustee, receiver or liquidator of all or any substantial part of their
respective property.
E. The Borrower is in material default of the Security Agreement.
4. REMEDIES.
---------
Upon the occurrence of any Event of Default, at the election of Payee,
the principal balance remaining unpaid under this Note, and all unpaid interest
accrued thereon and any other amounts due hereunder, shall be and become
immediately due and payable in full. Failure to exercise this option shall not
constitute a waiver of the right to exercise same in the event of any subsequent
Event of Default. Payee shall not, by any act of omission or commission, be
deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by Payee, and then only to the
extent specifically set forth therein. The rights, remedies and powers of the
Payee as provided in this Note are cumulative and concurrent, and may be pursued
singly, successively, or together against the Borrower, all at the sole
discretion of Payee.
5. WAIVER OF RIGHTS.
-------------------
Borrower hereby waives freely and voluntarily any and all defense,
counterclaim, and set-off that it may have in connection with this Note.
BORROWER FURTHER WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH THIS NOTE
AND THE LOAN EVIDENCED HEREBY. Borrower further acknowledges it has been
represented by counsel in connection with this Note.
6. GOVERNING LAW.
---------------
This Note shall be governed and controlled as to validity,
enforcement, interpretation, construction, and effect, and in all other
respects, by the laws of the State of Nevada without reference to rules
governing choice of law.
7. VENUE AND SERVICE OF PROCESS.
---------------------------------
Borrower agrees that all actions or proceedings in any way arising out of
or related to this Note may be litigated in courts having situs in ▇▇▇▇▇▇
County, Georgia, including the United States District Court. Borrower consents
to the personal jurisdiction of such courts and agrees that process may be
served by certified mail or overnight courier in any action or proceedings in
any way arising out of or related to this Note.
8. TIME OF THE ESSENCE.
-----------------------
Time is of he essence to this Note and failure to timely perform is a
material default.
9. WARRANTY.
---------
Borrower warrants that a true and correct copy of a corporate resolution
authorizing the execution of this Note and the Security Agreement has been
provided to Payee.
10. ATTORNEYS' FEES.
-----------------
Borrower agrees to pay all costs, expenses, and reasonable attorneys'
fees paid or incurred by Payee in connection with any collection or enforcement
proceedings, including defenses or counterclaims, regarding this Note.
11. SEVERABILITY.
-------------
If any provision of this Note is held by an administrative agency or
court of competent jurisdiction to be illegal, invalid or unenforceable, such
provision shall be fully severable. The effect of such holding shall be confined
to the provision held to be illegal, invalid or unenforceable, and shall not
impair or invalidate the remainder of this Note.
12. OTHER GENERAL AGREEMENTS.
---------------------------
A. Borrower agrees that the Note is an exempted transaction under
the Truth In Lending Act, 15 U.S.C., Section 1601, et seq.
B. This Note may not be changed or amended orally but only by an
instrument in writing signed by the party against whom enforcement of the change
or amendment is sought.
C. Payee and the Lenders shall not be construed for any purpose to be
a partner, joint venturer, agent or associate of Borrower or of any lessee,
operator, concessionaire or licensee of Borrower in the conduct of its business.
Borrower agrees to indemnify, defend, and hold Payee and/or Lenders harmless
from and against any and all damages, costs, expenses and liability that may be
incurred by Payee and/or Lenders as the result of a claim that Payee and/or
Lenders is such partner, joint venturer, agent or associate.
D. If the interest provisions of this Note shall result at any time
during the term of this Note in an effective rate of interest which, for any
month, exceeds the limit of usury or other laws applicable to this Note, all
sums in excess of those lawfully collectible as interest of the period in
question shall, without further agreement or notice between or by any party
hereto, be applied to principal immediately upon receipt of such monies by
Payee, with the same force and effect as though Payee has specifically
designated such extra sums to be so applied to principal and Payee had agreed to
accept such extra payment(s) as a premium-free prepayment.
E. Payee and/or any Lender may at any time assign its rights in this
Note or any part thereof subject to compliance with applicable federal and state
securities laws. Borrower may not assign its interest in this Note either
voluntarily or by operation of law without the prior written consent of Payee.
IN WITNESS WHEREOF, the undersigned have executed this Note as of the
date first above written.
Star E Media Corp.
By: /s/ E. G. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
E.G. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President & COO
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Attorney-in-fact
----------------------------------------
(Name & Title)
EXHIBIT A
To
Star E Media Corporation
December 27, 2002 Secured Promissory Note
Lender . . . . . . . . . . . . Address Phone # Fax # Principal Amount
-------------------------- -------------- -------------- -----------------
▇▇▇▇▇▇ Commander . . . . . . . ▇▇▇ ▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ $ ▇▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. . . . . . . ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ $ 50,000
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇. . . . . . . . . ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ $ 30,000
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ . . . . . . . . . ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ $ 25,000
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. . . . . . . . ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (770) 587-2244 (▇▇▇) ▇▇▇-▇▇▇▇ $ 15,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ $ 10,000