Exhibit 99.4
2KSOUNDS CORPORATION
A Nevada Corporation
PROMISSORY NOTE
$__________ March 20, 2003
FOR VALUE RECEIVED, 2KSOUNDS CORPORATION, (the "Company"), with its
principal offices at 21700 Oxnard Street, Suite 1030, Woodland Hills, California
91367, promises to pay to the order of ____________, an individual residing at
________________________ or his assigns (the "Holder"), the principal amount of
$________ in such coin or 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 $________ with the first
payment due on April 20, 2003 and the final payment due on March 20, 2004 (the
"Maturity Date"). The entire principal amount of $____________ 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.
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(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 corporate
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 property; 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
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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 Big Interactive Group, LLC ("Big Interactive") pursuant to the
transactions contemplated by that certain Subscription Agreement by and among
Big Interactive and the Company of even date herewith and all of the promissory
notes issued by the Big Interactive 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 of
$___________ 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
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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.
2KSOUNDS COPORATION,
a Nevada Corporation
By: ______________________________
Name:
Title:
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