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Exhibit 10.2
PROMISSORY NOTE
$200,000.00 New York, New York
June 29, 2000
FOR VALUE RECEIVED, the undersigned, LiQ, INC., a Delaware corporation
(the "BORROWER"), hereby unconditionally promises to pay to the order of
ZERO.NET, Inc. (the "LENDER") at the office of the Lender, located at 21520 30th
Drive S. E., Ste. 105, Bothell, WA 98021, in lawful money of the United States
of America and in immediately available funds, at any time after December 29,
2000 on demand an amount of TWO HUNDRED THOUSAND and no/100 ($200,000.00)
Dollars together with interest from the date of this Note on the unpaid
principal balance hereof from time to time outstanding at the rate per annum of
the Prime Rate payable on March 30 and September 30 of each year, commencing
September 30, 2000, and upon the repayment of the principal amount of this Note.
"Prime Rate" shall mean the rate of interest per annum from time to time quoted
in The Wall Street Journal as the prevailing prime rate.
The consideration for this Note is the loan of money, including an
advance against this Note made as of the date hereof in a principal amount of
$200,000.00.
This Note is secured as provided in the Security Agreement, dated as of
June 29, 2000 (the "SECURITY AGREEMENT"), between the Borrower and the Lender.
Reference is hereby made to the Security Agreement for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security, the terms and conditions upon which the security
interests were granted and the rights of the holder of this Note in respect
thereof.
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing:
(i) the Borrower shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower shall make a
general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower any case,
proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets that results in the entry of an order for any such
relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or
Promissory Note
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(iv) the Borrower shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or
(v) the Borrower shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they
become due; or
(vi) the Security Agreement shall cease, for any reason, to be
in full force and effect, or the Borrower shall so assert, or any Lien
created by the Security Agreement shall cease to be enforceable and of
the same effect and priority purported to be created thereby; or
(vii) the Borrower shall fail to pay the principal, interest
or any other amount payable hereunder or under the Security Agreement
within fifteen days after any such principal, interest or other amount
becomes due in accordance with the terms hereof or thereof; or
(viii) any representation or warranty made or deemed made by
the Borrower herein or in the Security Agreement or that is contained
in any certificate, document or financial or other statement furnished
by the Borrower at any time under or in connection with this Note or
the Security Agreement shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(ix) the Borrower shall default in the observance or
performance of any agreement contained herein or in the Security
Agreement (other than as provided in clauses (vii) and (viii) above),
and such default shall continue unremedied for a period of thirty days
after notice to the Borrower from the Lender;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii), (iii) or (iv) above, the Loan hereunder (with accrued
interest thereon) shall immediately become due and payable, and (B) if such
event is any other Event of Default, the Lender may declare the Loan hereunder
(with accrued interest thereon) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. During the period from the
occurrence of an Event of Default until the earlier of (i) the time such Event
of Default is cured by Borrower and (ii) the time the balance due hereunder
(with accrued interest thereon) is paid in full, interest shall accrue thereon
at the Prime Rate plus 200 basis points. No further advances will be made if
this Note is in default, even if the Borrower cures such default. If this Note
is placed in the hands of an attorney for collection, whether or not suit shall
be brought to collect any of the principal, interest or deficiency of this Note,
the Borrower promises to pay reasonable attorneys' fees and all costs of
collection.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Security
Agreement and used herein shall have the meanings given to them in the Security
Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed,
issued and delivered as of the date first written above.
LiQ, INC.
By: /s/ Michael Amideo
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