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EXHIBIT 10.3
PROMISSORY NOTE
$120,000.00 MAY 1, 1997
THE ANCHORA COMPANY (hereinafter referred to as "Maker"), for value
received, hereby promises to pay to the order of MAXXIS GROUP, INC., a Georgia
corporation (hereinafter referred to as "Payee"), the aggregate principal sum of
ONE HUNDRED TWENTY THOUSAND 00/100 DOLLARS ($120,000.00) on the earlier of (i)
May 1, 2002 or (ii) the closing of an initial public offering of Payee's capital
stock for cash which is offered and sold in a transaction registered under the
Securities Act of 1933, as amended, through one or more underwriters, all
pursuant to an underwriting agreement between Payee and such underwriters,
resulting in aggregate net proceeds of $5,000,000 to the Company, together with
interest on the unpaid principal balance at the rate of 8.75% per annum,
compounded annually. The principal hereof and the interest thereon are payable
at 1901 Montreal Road, Suite 108, Tucker, GA 30084, or at such other place as
Payee may from time to time designate to Maker in writing, in coin or currency
of the United States of America.
Maker may, at any time and from time to time, prepay all or any portion
of the principal of this Note remaining unpaid, without penalty or premium. In
the event Maker sells any shares of capital stock of Payee that are held by
Maker, a portion of this Note in an amount equal to the after-tax proceeds
received by Maker from the sale of such shares shall immediately become due and
payable. Prepayments shall be applied first to the payment of accrued but unpaid
interest on this Note and the balance to principal.
If any of the following events (an "Event of Default") shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise), then this Note shall thereupon be and become, forthwith due and
payable, without any further notice or demand of any kind whatsoever, all of
which are hereby expressly waived:
(a) If Maker defaults in the payment of principal or interest
on this Note when and as the same shall become due and payable and such
default continues for 20 days after Maker receives notice from Payee of
such default; or
(b) If Maker makes an assignment for the benefit of creditors
or admits in writing an inability to pay his or its debts generally as
they become due;
(c) If an order, judgment or decree is entered adjudicating
Maker bankrupt or insolvent;
(d) If Maker petitions or applies to any tribunal for the
appointment of a trustee or receiver of Maker, or of any substantial
part of the assets of Maker, or commences any proceedings relating to
Maker under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect; or
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(e) If any such petition or application is filed, or any such
proceedings are commenced, against Maker, and Maker by any act
indicates its approval thereof, consent thereto, or acquiescence
therein, or an order is entered appointing any such trustee or
receiver, or approving the petition in any such proceedings, and such
order remains unstayed and in effect for more than 90 days.
This Note is with full recourse to any assets of Maker.
Any failure on the part of Payee at any time to require the performance
by Maker of any of the terms or provisions hereof, even if known, shall in no
way affect the right thereafter to enforce the same, nor shall any failure of
Payee to insist on strict compliance with the terms and conditions hereof be
taken or held to be a waiver of any succeeding breach or of the right of Payee
to insist on strict compliance with the terms and conditions hereof.
Time is of the essence.
This Note shall be governed by, and enforced and interpreted in
accordance with, the laws of the State of Georgia without regard to the
principles of conflict of laws.
In the event this note, or any part hereof, is collected by or through
an attorney-at-law, Maker agrees to pay all costs of collection including, but
not limited to, attorneys' fees equal to 15% of the principal and interest then
due. In the event that Maker fails to make any payment when due, Payee shall
provide written notice of default to Maker, which notice shall allow Maker ten
(10) days from the date of receipt of such notice in which to cure such default.
If such default is not cured within the time allowed, the balance hereof shall
be deemed to be immediately accelerated without further notice to Maker.
IN WITNESS WHEREOF, Maker has executed this Note under seal as of the
date first set forth above.
THE ANCHORA COMPANY
Bruce Secretaries Ltd.
(Secretary of the Company)
By: /s/ M. Catherine Bruce
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M. Catherine Bruce
Title: Secretary
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