Exhibit 99.2
BIG INTERACTIVE GROUP, LLC
A Delaware Limited Liability Company
PROMISSORY NOTE
$270,000 March 20, 2003
FOR VALUE RECEIVED, BIG INTERACTIVE GROUP, LLC, a Delaware limited
liability company (the "Company"), promises to pay to the order of 2KSOUNDS
CORPORATION, a Nevada corporation (the "Holder"), with its principal offices at
21700 Oxnard Street, Suite 1030, Woodland Hills, California 91367, the principal
amount of $270,000, in currency of the United States of America as at the time
of payment shall be legal tender for the payment of public or private debts,
together with simple interest accrued from the date hereof at the rate of 6%
percent per annum; provided, however, subject to conditions set forth in Section
4.2 herein, if this Note is paid in full with six months from the date hereof,
the principal amount due under this Note shall be reduced by 10%. Payments of
principal and interest are to be made at the address of the Holder designated
above or at such other place as the Holder shall have notified the Company in
writing at least five days before such payment is due.
Interest shall be computed on the basis of a 360-day year. Interest shall
be due and payable in 12 equal monthly installments of One Thousand Fifty-One
Dollars and thirty Cents ($1,051.3) with the first payment due on April 19, 2003
and the final payment due on March 19, 2004 (the "Maturity Date").
A one-time payment of principal in the amount of Fifty-Nine Thousand Seven
Hundred Thirty Nine Dollars and eighty Cents ($59,739.80) shall be due and
payable by the Company to Holder on or before 5:00 PM (PST), March 26, 2003.
Thereafter, remaining principal amount of Two Hundred and Ten Thousand Two
Hundred Sixty Dollars and Twenty Cents ($210,260.2) shall be due and payable on
the Maturity Date.
The payment of principal and interest under this Note shall be personally
guaranteed Carl Harris, an individual residing at 324 North Diamond Bar
Boulevard, Diamond Bar, California 91765. A copy of the guaranty is annexed
hereto as Exhibit A.
1. Events of Default. (a) Upon the occurrence of any of the following
events (herein called "Events of Default"):
(i) The Company shall fail to pay the principal of or interest on this
Note when due hereunder (subject to a ten-day grace period);
(ii) (A) The Company shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement, readjustment
of its debts, receivership, dissolution, liquidation, winding-up, composition or
any other relief under any bankruptcy law, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition, readjustment
of debt or any other similar act or law, of any jurisdiction, domestic or
foreign, now or hereafter existing; or (B) the Company shall admit the material
allegations of any petition or pleading in connection with any such bankruptcy
proceeding; or (C) the Company shall apply for, or consent or acquiesce to, the
appointment of a receiver, conservator, trustee or similar officer for it or for
all or a substantial part of its property; or (D) the Company shall make a
general assignment for the benefit of creditors;
(iii) (A) The commencement of any proceedings or the taking of any other
action against the Company in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts, liquidation, dissolution, arrangement, composition,
or any other relief under any bankruptcy law or any other similar act or law of
any jurisdiction, domestic or foreign, now or hereafter existing and the
continuance of any of such events for 30 days uncontested, undismissed, unbonded
or undischarged; or (B) the appointment of a receiver, conservator, trustee or
similar officer for the Company for any of its property and the continuance of
any of such events for 30 days uncontested, undismissed, unbonded or
undischarged; or (C) the issuance of a warrant of attachment, execution or
similar process against any of the property of the Company and the continuance
of such event for 30 days uncontested, undismissed, unbonded and undischarged;
(iv) The Company shall fail to comply with any of its material
obligations under this Note; or
(v) Any judgment or judgments against the Company or any attachment,
levy or execution against any of its properties for any amount in excess of
$50,000 in the aggregate shall remain unpaid, or shall not be released,
discharged, dismissed, stayed or fully bonded for a period of 30 days or more
after its entry, issue or levy, as the case may be;
then, and in any such event, the Holder shall, at its option upon written notice
to the Company, declare the entire principal amount of this Note then
outstanding together with accrued unpaid interest thereon immediately due and
payable, and the same shall forthwith become immediately due and payable without
presentment, demand, protest, or further notice of any kind, all of which are
expressly waived. If the Note is not paid in full upon acceleration, as required
above, interest shall accrue on the outstanding principal of and interest on
this Note from the date of the Event of Default up to and including the date of
payment at a rate equal to the lesser of 10% percent per annum or the maximum
interest rate permitted by applicable law.
(b) Non-Waiver and Other Remedies. No course of dealing or delay on the
part of the Holder of this Note in exercising any right hereunder shall operate
as a waiver or otherwise prejudice the right of the Holder of this Note. No
remedy conferred hereby shall be exclusive of any other remedy referred to
herein or now or hereafter available at law, in equity, by statute or otherwise.
(c) Collection Costs; Attorneys' Fees. If any legal proceeding
is brought for the enforcement of this Note, and a final judgment in rendered by
a court of competent jurisdiction in connection therewith, the successful or
prevailing party shall be entitled to recover from the other party reasonable
attorneys' fees and other expenses and costs incurred in connection with such
proceeding.
2. Obligation to Pay Principal and Interest. No provision of this Note
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Note at the place,
at the respective times, at the rates, and in the currency herein prescribed.
3. Covenants. The Company covenants and agrees that, while this Note is
outstanding it shall:
3.1. Pay and discharge all taxes, assessments and governmental charges
or levies imposed upon it or upon its income and profits, or upon any properties
belonging to it before the same shall be in default; provided, however, that the
Company shall not be required to pay any such tax, assessment, charge or levy
which is being contested in good faith by proper proceedings and adequate
reserves for the accrual of same are maintained if required by generally
accepted accounting principles;
3.2. Use commercially reasonable efforts to preserve its existence and
continue to engage in the business of the same general type as conducted as of
the date hereof; and
3.3. Comply in all material respects with all statutes, laws,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations and requirements (the "Requirement(s)") of all
governmental bodies, departments, commissions, boards, courts, authorities,
officials, or officers, which are applicable to the Company or its business;
except wherein the failure to comply would not have a material adverse effect on
the Company or its business; provided that nothing contained herein shall
prevent the Company from contesting the validity or the application of any
Requirements.
4. Repayment.
4.1. Consolidation or Merger; Sale of Assets or Shares. This Note shall
be paid in full, without premium, in the event (a) the Company consolidates or
merges with another entity, unless (i) the Company shall be the surviving entity
in such consolidation or merger or (ii) the other entity controls, is under
common control with or is controlled by the Company immediately prior to the
consolidation or merger whether or not the Company shall be the surviving entity
in such consolidation or merger, in which event this Note shall remain
outstanding as an obligation of the consolidated or surviving entity, or (b) the
Company consummates a sale of all or substantially all of its assets.
4.2. Voluntary Repayment. This Note may be prepaid or called by the
Company at any time in whole or in part at any time without penalty or premium,
but with at least five days
notice to the Holder. Interest shall accrue to and include the date on which
prepayment is made. In the event all of the promissory notes issued by the
Company and Holder pursuant to the transactions contemplated by that certain
Subscription Agreement by and among the Company and the Holder of even date
herewith and all of the promissory notes issued by the Company pursuant to the
transactions contemplated by that certain Common Stock Purchase Agreement by and
among the Company, Bruce Gladstone and Michael Blakey of even date herewith
(collectively, the "Notes") are repaid within six months of the Closing Date,
the principal amount due under this Note shall be reduced by 10%.
5. Required Consent. Neither of the parties hereto may modify any of the
terms of this Note without the prior written consent of the other party.
6. Lost Documents. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Note or any Note
exchanged for it, and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Note,
if mutilated, the Company will make and deliver in lieu of such Note a new Note
of like tenor and unpaid principal amount and dated as of the original date of
the Note.
7. Miscellaneous.
7.1. Benefit. This Note shall be binding upon and inure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
7.2 Notices and Addresses. All notices, offers, acceptances and any
other acts under this Note (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressee in person, by Federal Express
or similar receipted delivery, or, if mailed, postage prepaid, by certified
mail, return receipt requested to the addresses listed on page 1 of this Note or
to such other address as any of them, by notice to the others may designate from
time to time. Time shall be counted to, or from, as the case may be, the
delivery in person or five business days after mailing.
7.3 Governing Law. This Note and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided therein or performance shall
be governed and interpreted according to the law of the State of California,
without regard to its principles of conflicts of law.
7.4 Jurisdiction and Venue. The Company and the Holder each (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Note shall be instituted exclusively in the California State Superior Court,
County of Los Angeles or in the United States District Court for the Central
District of California, (ii) waive any objection to the venue of any such suit,
action or proceeding and the right to assert that such forum is not a convenient
forum, and (iii) irrevocably consent to the jurisdiction of the California State
Superior Court, County of Los Angeles, and the United States District Court for
the Central District of California in any such suit, action or proceeding, and
the Company further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in California
State Superior Court, County of Los Angeles, or in the United States District
Court for the Central District of California and agrees that service of process
upon it mailed by certified mail to its address shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding.
7.5 Section Headings. Section headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Note.
7.6 Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements contained herein shall survive the
delivery of this Note.
IN WITNESS WHEREOF, this Note has been executed and delivered on the date
specified above by the duly authorized representative of the Company.
BIG INTERACTIVE GROUP, LLC
By: /s/ Carl Harris
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Carl Harris
Managing Member