EXHIBIT 10.3
PROMISSORY NOTE FROM CIROND CORPORATION TO SAND HILL FINANCE, LLC
DATED APRIL 4, 2006 IN THE AMOUNT OF $2,100,000
PROMISSORY NOTE
$2,100,000.00 Dated: April 4, 2006
FOR VALUE RECEIVED, the undersigned, CIROND CORPORATION ("CIROND"), a
Nevada corporation, HEREBY PROMISES TO PAY to the order of SAND HILL FINANCE,
LLC ("SHF") the principal amount of Two Million, One Hundred Thousand Dollars
($2,100,000), together with interest on any and all principal amounts remaining
unpaid hereunder from time to time outstanding. Interest shall accrue at a rate
equal to 18% per annum, on a 360-day basis. Interest shall be payable monthly,
on the first day of each month, for so long as any amount is outstanding
hereunder. Cirond shall pay mandatory payments in reduction of principal as
follows: $150,000 to SHF by April 7, 2006, $150,000 on or before April 30, 2006,
$500,000 on or before June 30, 2006, and $500,000 on or before September 30,
2006. Cirond shall pay 25% of the proceeds from an anticipated OEM agreement and
15% of the proceeds of any sale or issuance of equity or debt securities over
$3,000,000 as mandatory prepayments of the outstanding amount hereunder. All
unpaid principal and accrued but unpaid interest shall be due on December 31,
2006 (the "Maturity Date").
Cirond may prepay all or any portion of this Note without penalty or
premium. All payments shall be applied first to fees and expenses, then to
interest, and then to principal.
Presentment for payment, demand, notice of protest and all other
demands and notices of any kind in connection with the execution, delivery,
performance and enforcement of this Note are hereby waived.
Cirond shall pay all reasonable fees and expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred by Agent or any SHF
in the enforcement or attempt to enforce any of Cirond's obligations hereunder
not performed when due. This Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California.
This Note provides further evidence of the obligations of Servgate
Technologies, Inc. ("Servgate") that Cirond assumed under Section 2 of the
Foreclosure Sale Agreement (the "Foreclosure Sale Agreement") of even date among
Cirond, SHF, Servgate and BSGL, LLC. SHF may enforce such assumed obligations
without this Note.
IN WITNESS WHEREOF, Cirond has caused this Note to be duly executed by
one of its officers thereunto duly authorized on the date hereof.
CIROND CORPORATION,
a Nevada corporation
By: /s/ NICHOLAS R. MILLER
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Name: Nicholas R. Miller
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Title: C.E.O.
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