PROMISSORY NOTE
JANUARY 31, 2005
$750,000.00
THIS PROMISSORY NOTE is issued by Usurf America, Inc., a Nevada
corporation, having a principal place of business at 390 Interlocken Crescent,
Suite 900, Broomfield, Colorado 80021, (the "Company"), in favor of Holder (as
hereinafter defined).
FOR VALUE RECEIVED, the Company promises to pay to Evergreen Venture
Partners, LLC or its registered assigns (the "Holder"), the principal sum of
$750,000.00 on July 1, 2006 (the "Maturity Date"). The Company may from time to
time prepay any portion of the principal amount of this Promissory Note without
the prior written consent of the Holder and without premium or penalty.
Notwithstanding the foregoing, this Promissory Note shall terminate and all
obligations of the Company to Holder herein shall terminate immediately upon the
occurrence of the Equity Condition.
This Promissory Note is subject to the following additional provisions:
Section 1. Events of Default.
a) "Event of Default", wherever used herein, means any one of
the following events (whatever the reason and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to
any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):
i) any default in the payment of the principal of
this Promissory Note, which default is not cured or waived
within 10 days;
ii) any representation or warranty made in the
Agreement shall be untrue or incorrect in any material respect
as of the date when made or deemed made; or
iii) the Company or any of its subsidiaries shall
commence, or there shall be commenced against the Company or
any such subsidiary a case under any applicable bankruptcy or
insolvency laws as now or hereafter in effect or any successor
thereto, or the Company or any subsidiary commences any other
proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any subsidiary
thereof or there is commenced against the Company or any
subsidiary thereof any such bankruptcy, insolvency or other
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proceeding which remains undismissed for a period of 60 days;
or the Company or any subsidiary thereof is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the
Company or any subsidiary thereof suffers any appointment of
any custodian or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 60 days; or the Company or any subsidiary thereof
makes a general assignment for the benefit of creditors; or
the Company shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally
as they become due; or the Company or any subsidiary thereof
shall call a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts; or
the Company or any subsidiary thereof shall by any act or
failure to act expressly indicate its consent to, approval of
or acquiescence in any of the foregoing; or any corporate or
other action is taken by the Company or any subsidiary thereof
for the purpose of effecting any of the foregoing.
b) If any Event of Default occurs, the full principal amount
of this Promissory shall become, at the Holder's election, immediately
due and payable.
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Section 2. Definitions. All capitalized terms used herein but not
defined herein shall the meanings ascribed to such terms in the Surrender and
Exchange Agreement of even date herewith between Holder and the Company (the
"Agreement"). The following terms shall have the following meanings:
a) "Common Stock" means the common stock, $.0001 par value per
share, of the Company and stock of any other class into which such
shares may hereafter have been reclassified or changed.
b) "Equity Condition" shall mean, (i) the Common Stock is
trading uninterrupted on the Principal Market and (ii) the price at
which the Common Stock is trading on the Principal Market during any
consecutive (uninterrupted) thirty calendar day period is not below
$0.21 per share.
c) "Person" means a corporation, an association, a
partnership, organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.
d) "Principal Market" means the Over the Counter Electronic
Bulletin Board (or any successor market) where the Common Stock of the
Company is traded as of the date hereof.
Section 3. Except as expressly provided herein, no provision of this
Promissory Note shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of this Promissory Note as
herein prescribed. This Promissory Note is a direct debt obligation of the
Company.
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Section 4. If this Promissory Note shall be mutilated, lost, stolen or
destroyed, the Company shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Promissory Note, or in lieu of or in
substitution for a lost, stolen or destroyed Promissory Note, a new Promissory
Note for the principal amount of this Promissory Note but only upon receipt of
evidence of such loss, theft or destruction of such Promissory Note, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Company.
Section 5. In the event of a dispute between the parties that arises out
of this Promissory Note or the Agreement, the parties agree to submit such
dispute to arbitration before the American Arbitration Association (the
"Association") in Denver, Colorado, in accordance with the then-current rules of
the Association; the award rendered by the arbitrator(s) shall be binding and a
judgment may be obtained on any such award in any court of competent
jurisdiction. It is expressly agreed that the arbitrator(s), as part of any
award, may award attorneys fees to the prevailing party. This Promissory Note
shall be deemed to be a contract made under, governed by and construed in
accordance with the substantive laws of the State of Colorado.
Section 6. Any waiver by the Company or the Holder of a breach of any
provision of this Promissory Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of this Promissory Note. The failure of the Company or the Holder to
insist upon strict adherence to any term of this Promissory Note on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Promissory Note. Any waiver must be in writing.
Section 7. If any provision of this Promissory Note is invalid, illegal or
unenforceable, the balance of this Promissory Note shall remain in effect, and
if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
Section 8. Whenever any payment or other obligation hereunder shall be due
on a day other than a business day, such payment shall be made on the next
succeeding business day.
Section 9. This Promissory Note may not be assigned, conveyed, pledged or
transferred by Holder absent the prior written consent of Company. The terms and
conditions of this Promissory Note shall be binding upon the successors and
assigns of the Holder and the Company, as the case may be.
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IN WITNESS WHEREOF, the Company has caused this Promissory Note to be
duly executed by a duly authorized officer as of the date first above indicated.
USURF AMERICA, INC.
By: /s/ Douglas O. McKinnon
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Name: Douglas O. McKinnon
Title: President & Chief Executive Officer
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