Sample Business Contracts

Promissory Note - Netgateway Inc. and King William LLC

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$400,000                        Salt Lake City, Utah          September 10, 2001

         FOR VALUE RECEIVED Netgateway,  Inc., a Delaware corporation ("Maker"),
promises  to pay to the order of King  William  LLC,  a Cayman  Islands  limited
liability company ("Noteholder"),  Four Hundred Thousand Dollars ($400,000) with
interest as set forth  hereinbelow at the rate and in accordance  with the terms
and conditions hereinafter set forth.

1.       Interest Rate; Payments

         (a) The  principal  amount  hereof  shall bear  interest at the rate of
eight  percent (8%) per annum  (computed on a 365-day year) from the date hereof
until  August 15, 2004 (the date on which the unpaid  principal  balance of this
Note, together with accrued but unpaid interest, shall be due and payable).

         (b) Interest accrued on this Note shall be payable quarterly in arrears
on the tenth day of each of November, February, May and August.

         (c) All  payments  made  hereunder  shall be  applied  first to accrued
interest, then to unpaid principal.

         (d) If Maker fails to make any payment  under this Note within five (5)
days  after the  payment is due,  Maker  shall pay a late  charge  equal to five
percent (5%) of such overdue  amount.  The parties hereto agree that it would be
impracticable  or  extremely  difficult to fix the actual  damages  resulting to
Noteholder  from Maker's  failure to make timely  payments.  The parties further
agree  that the  foregoing  late  charge is a  reasonable  sum that  takes  into
consideration all of the circumstances  existing on the date of this Note and is
a fair and  reasonable  estimate of the costs and expenses that will be incurred
by Noteholder due to Maker's failure to make timely payments.

2.       Prepayment

     Upon ten (10) days prior written notice,  Maker shall have the right during
the term  hereof  without  payment  of any fee or  penalty  to prepay all or any
portion  of the  unpaid  principal  balance  of this  Note or  interest  accrued
hereunder.  The then  remaining  balance of this Note and all  interest  accrued
hereunder  shall become due and payable in full  (without  payment of any fee or
penalty) on the thirtieth  (30) day following the  completion by Maker of equity
financings  (i.e.  issuances  for cash of Maker's  common stock or securities of
Maker  convertible  into or  exchangeable  for common  stock of Maker other than
through the exercise of warrants and employee  stock  options)  with proceeds in
the  aggregate  to Maker of $5.0  million  or more.  Proceeds  from the  private
placement  in  process  by Maker on the date this  Note is  issued  shall not be
included in  determining  whether  proceeds of $5.0 million has been received by

3.       Forgiveness

     Noteholder  agrees  to  forgive  repayment  of this Note and that this Note
shall  automatically be deemed to have been repaid in full and shall be returned
to  Maker  marked  "Paid  in  Full"  at the  time  each of the  following  three
conditions is simultaneously satisfied:

                  (i) Noteholder,  together with all successors and predecessors
         in  interest  if any,  shall  have  received  at  least  $2,250,000  of
         proceeds,  net of  commissions,  from the sale of common stock ("Common
         Stock"),  par value  $.001 per  share,  of Maker,  which was either (A)
         issued by Maker to Noteholder upon conversion of that certain Debenture
         originally  issued by the Maker to the  Noteholder on July 31, 2000, or
         (B) acquired from Maker by Noteholder  upon exercise of the warrants to
         purchase  Common  Stock  issued to the  Noteholder  by the Maker (after
         subtracting the exercise price of such warrants);

                  (ii) either (A)  Noteholder  shall have sold all of its shares
         of  Common  Stock,  (B)  there  shall  at  that  time  be an  effective
         registration  statement  with  respect  to all of the  shares of Common
         Stock held by  Noteholder  or (C) Maker  shall have been  acquired in a
         business  combination  transaction and in such  transaction  Noteholder
         shall have received  cash,  common stock or a  combination  of cash and
         common  stock of the  acquirer  which  common stock of the acquirer was
         registered on Form S-4; and

                  (iii)  either  (A) the  Common  Stock is  listed on one of the
         NASDAQ  National Market System,  NASDAQ Small Cap Market,  the American
         Stock  Exchange or the New York Stock  Exchange or (B) Maker shall have
         been acquired and in such  transaction  Noteholder  shall have received
         cash,  common  stock or a  combination  of cash and common stock of the
         acquirer  which  common  stock is listed on one of the NASDAQ  National
         Market, NASDAQ Small Cap Market, the American Stock Exchange or the New
         York Stock Exchange.

4.       Default

         (a) Events of Default.  Maker shall be in default of this Note upon the
occurrence of any of the following:

               (i)  Failure  of Maker to make any  payment  under this Note when

               (ii)   Failure  of  Maker  to  perform  or  observe  any  of  its
obligations under this Note (other than those requiring  payment of money),  the
Registration Rights Agreement dated as of July 31, 2000 by and between Maker and
Noteholder,  as amended (other than with respect to late filing or effectiveness
of the registration  statement referred to therein for which the remedy shall be
as provided therein,  including Section 2(b)(vi) thereof), any warrant issued by
Maker  to the  Noteholder  and  exercisable  for  Common  Stock,  or the  Second
Restructuring  Agreement  dated as of July 11,  2001 by and  between  Maker  and
Noteholder  and to commence and proceed  diligently to cure such failure  within
three (3) days after written notice thereof from  Noteholder to Maker and in any
event to cure  such  failure  within  five (5) days  after the date on which the
written notice of default is given by Noteholder to Maker.

               (iii) The filing by Maker of a voluntary  petition in bankruptcy,
a petition  for  reorganization,  arrangement  or other  relief under the United
States Bankruptcy Act, or a voluntary petition for the appointment of a receiver
or comparable  relief from creditors  under the laws of any State, or the making
by Maker of an  assignment  of all or  substantially  all of its  assets for the
benefit of creditors.

               (iv) Any default shall occur under the terms applicable to any of
the indebtedness for borrowed money of the Maker (including, without limitation,
all notes payable, debentures, and similar instruments on which interest charges
are  typically  paid  and  capitalized  lease  obligations)  outstanding  in  an
aggregate  principal amount at any one time exceeding  $150,000 and such default
shall (x) consist of the failure to pay such  indebtedness at maturity  thereof,
or (y) result in, or  continue  unremedied  for a period of time  sufficient  to
permit, the acceleration of such indebtedness.

               (v) The levy of a writ of  attachment  or execution in the amount
of  $150,000  or more  upon the  property  of  Maker,  but only if said  writ or
execution is not stayed, removed or vacated within ten (10) days.

               (vi) The  Common  Stock  shall not be listed on either The Nasdaq
National Market System,  The Nasdaq Small Cap Market, the Nasdaq Bulletin Board,
the New York Stock  Exchange  or the  American  Stock  Exchange  for a period in
excess of five (5) trading days.

         (b)  Acceleration on Default.  When Maker is in default of this Note as
provided in this Section 3, the entire unpaid  balance of interest and principal
of this Note shall become  immediately  due and payable  upon written  notice to
Maker by Noteholder.

         (c)  Interest  After  Default.  Upon failure to make any payment of any
installment of principal or interest when due hereunder,  Maker further promises
to pay,  automatically  on all  installments of principal and interest which are
not  timely  paid  when  due  and on the  then  outstanding  principal  balance,
additional  interest  in  addition  to the rate set forth  hereinabove,  so that
interest will then accrue at a rate equal to ten percent (10%).

5.       Miscellaneous Provisions

         (a) Notices. Any notice, payment,  demand, claim or other communication
under  this  Note  shall  be in  writing  and  shall  be made by hand  delivery,
first-class  mail  (registered  or  certified,   return  receipt  requested)  or
overnight courier warranting next-day delivery to the following addresses:

                  MAKER:            Netgateway, Inc.
                                    754 East Technology Avenue
                                    Orem, Utah 84097
                                    Attn:  Chief Financial Officer

                  NOTEHOLDER:       King William LLC
                                    c/o Navigator Management
                                    P.O. Box 972
                                    Road Town, Tortola, British Virgin Islands

All such  notices  shall be deemed to have been given at the time  delivered  by
hand, if personally  delivered;  two business days after being  deposited in the
mail if deposited  within the continental  United States and seven business days
after being deposited in the mail if deposited  outside the  continental  United
States, postage prepaid, if mailed; and the next business day after delivered to
courier,  if sent by overnight air courier  warranting  next-day  delivery.  Any
party may change the address to which each such notice or communication shall be
sent by giving  written  notice to the other  parties of such new address in the
manner provided herein for giving notice.

         (b) Attorneys'  Fees. In the event that any action is taken by Maker or
Noteholder in connection with this Note, or any related document or matter,  the
losing party in such legal  action,  in addition to such other  damages as he or
she  may be  required  to  pay,  shall  pay  reasonable  attorneys'  fees to the
prevailing party.

         (c)  Successors and Assigns.  The  provisions  and covenants  contained
herein shall inure to and be binding upon the successors, transferees, heirs and
assigns of the parties hereto. Maker shall not assign its obligations  hereunder
without written approval of Noteholder.

         (d) Interpretation. Whenever possible, each provision of this Note, and
any other related  document,  shall be interpreted in such manner as to be valid
under  applicable law. If any provision of any of the foregoing shall be invalid
or prohibited  thereunder,  such provision shall be ineffective to the extent of
such  prohibition  or  invalidity  without  invalidating  the  remainder of such
provision or the remaining provisions of such document.

         (e) Time of the Essence.  Time is of the essence as to the  performance
of each and every obligation of Maker and Noteholder pursuant to this Note.

         (f) Governing Law and Venue. This Note and all agreements  entered into
in connection  herewith shall be governed by and  interpreted in accordance with
the laws of the State of California for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of  laws.  Any  litigation  based  thereon,  or  arising  out of,  under,  or in
connection  with,  this  agreement or any course of conduct,  course of dealing,
statements  (whether oral or written) or actions of Maker or Noteholder shall be
brought and  maintained  exclusively in the state or Federal courts of the State
of California,  sitting in the City of Los Angeles.  Maker and Noteholder hereby
expressly and  irrevocably  submit to the  jurisdiction of the state and federal
Courts of the State of California for the purpose of any such  litigation as set
forth above and  irrevocably  agrees to be bound by any final judgment  rendered
thereby  in  connection  with  such  litigation.  Maker and  Noteholder  further
irrevocably  consents  to the  service of process by  registered  mail,  postage
prepaid, or by personal service within or without the State of California. Maker
and Noteholder  hereby  expressly and  irrevocably  waive, to the fullest extent
permitted by law, any  objection  which it may have or hereafter may have to the
laying of venue of any such  litigation  brought in any such court  referred  to
above  and  any  claim  that  any  such  litigation  has  been  brought  in  any
inconvenient  forum. To the extent that Maker or Noteholder has or hereafter may
acquire any immunity  from  jurisdiction  of any court or from any legal process
(whether through service or notice, attachment prior to judgment,  attachment in
aid of execution or otherwise) with respect to itself or its property, Maker and
Noteholder  each  hereby  irrevocably  waives  such  immunity  in respect of its
obligations  under  this  Note  and  the  related  agreements  entered  into  in
connection herewith.

         (g) Further Actions. Noteholder and Maker agree to execute such further
documents, and take such further actions as may be reasonably necessary to carry
out the provisions of this Note, or any agreement or document relating hereto or
entered into in connection herewith.

         (h) Section  Headings.  The  headings of the  sections of this Note are
inserted solely for convenience, and are not intended to govern, limit or aid in
the construction of any term or provision hereof.

         (i) Waivers and  Amendments.  None of the terms or  provisions  of this
Note may be waived,  altered,  modified or amended  except by an  instrument  in
writing, duly executed by the parties hereto.

         (j) Excess  Interest.  Any interest rate  provided for hereunder  which
exceeds the maximum rate provided by  applicable  law shall instead be deemed to
be such  maximum  rate and any  interest in excess of such  maximum rate paid to
Noteholder shall be applied to reduce the principal balance of this Note so that
in no event  shall  Noteholder  receive or be  entitled  to receive  interest in
excess of the maximum amount permitted by applicable law.

         (k) Waiver of Jury Trial. Each of the parties hereto irrevocably waives
all  right to trial by jury in any  action  or  counterclaim  arising  out of or
relating to this Note.

         (l) Entire  Agreement.  This Note and the other agreements  referred to
herein  and  the  Restructuring  Agreement  pursuant  to  which  it  was  issued
constitute  the entire  agreement  among the parties  hereto with respect to the
subject matter hereof and supersede all other agreements and understandings.

         IN WITNESS  WHEREOF  this Note has been  executed  as of the date first
above set forth.