Promissory Note - Netpliance Inc. and Craig Cantrell
PROMISSORY NOTE
$142,800.00 Austin, Texas June 30, 1999
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FOR VALUE RECEIVED, the undersigned, Craig Cantrell (the "Maker"), hereby
unconditionally promises to pay to the order of Netpliance, Inc., a Texas
corporation, (the "Payee"), at its offices in Austin, Texas or such other
address given to the Maker by the Payee, the principal sum of One Hundred Forty
Two Thousand Eight Hundred and No One-Hundredths Dollars ($142,800.00), in
lawful money of the United States of America, together with interest on the
unpaid principal balance from day-to-day remaining, computed from the date
hereof until payment in full of the principal sum at the rate per annum of seven
percent (7%).
1. Payment. The principal of and interest upon this promissory note (the
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"Note") shall be due and payable on June 30, 2004.
2. Application of Payment. Payments made to the Payee by the Maker
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hereunder shall be applied first to accrued and unpaid interest on the principal
amount of this Note and then to the outstanding principal amount of this Note.
3. Security Interest. This Note is secured by a security interest
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evidenced by that certain Pledge Agreement (the "Pledge Agreement"), dated June
30, 1999, by and among Maker and Payee.
4. Waivers. Maker waives demand for payment, presentment, protest, notice
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of protest and non-payment, or other notice of default, notice of acceleration
and intention to accelerate, and agrees that its liability under this Note shall
not be affected by any renewal or extension in the time of payment hereof or any
other indulgences and hereby consents to any and all renewals, extensions,
indulgences, releases or changes.
No waiver by Payee of any of its rights or remedies hereunder shall be
considered a waiver of any other or subsequent right or remedy of Payee; no
delay or omission in the exercise or enforcement by Payee of any such rights or
remedies shall be construed as a waiver thereof; and no exercise or enforcement
of any such rights or remedies shall be held to exhaust any such right or
remedy.
5. Events of Default. An "event of default" shall exist hereunder if any
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one or more of the following events shall occur and be continuing:
(a) the Maker shall fail or refuse to pay when due any principal of,
or interest upon, this Note when due and payable;
(b) the Maker shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor or liquidator of the Maker or of
all or a substantial part of its assets, (ii) file a voluntary petition in
bankruptcy, admit in writing that it is unable to pay its debts as they
become due or generally not pay its debts as they become due, (iii) make a
general assignment for the benefit of creditors, (iv) file a petition or
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy or insolvency laws, (v) file an answer
admitting the material allegations of, or consent to, or
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default in answering, a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or (vi) take corporate action for
the purpose of effecting any of the foregoing;
(c) an involuntary petition or complaint shall be filed against the
Maker seeking bankruptcy or reorganization or the appointment of a
receiver, custodian, trustee, intervenor or liquidator of the Maker, or of
all or substantially all of its assets, and such petition or complaint
shall not have been dismissed within thirty (30) days of the filing
thereof; or an order, order for relief, judgment or decree shall be entered
by any court of competent jurisdiction or other competent authority
approving a petition or complaint seeking reorganization of the Maker or
appointing a receiver, custodian, trustee, intervenor or liquidator of the
Maker, or of all or substantially all of its assets; or
(d) the failure to have discharged within a period of ten (10) days
after the commencement thereof any attachment, sequestration or similar
proceedings against any of the Maker's assets.
6. Remedies. Upon the occurrence of any Event of Default, the Payee may,
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at its option, declare the entire unpaid balance of principal and accrued
interest on this Note to be immediately due and payable and exercise any and all
remedies permitted by the Pledge Agreement or applicable law, provided, however,
upon the occurrence of any of the Events of Default described in items 5.(b) or
5.(c) above, the entire unpaid balance of principal and accrued interest upon
this Note shall, without any action by the Payee, immediately become due and
payable without demand for payment, presentment, protest, notice of protest and
non-payment, or other notice of default, notice of acceleration and intention to
accelerate or any other notice, all of which are expressly waived by the Maker.
7. Prepayments. The Maker may prepay this Note, without penalty, in whole
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or in part, at any time, by giving the Payee written notice of the amount to be
prepaid at least two days prior to the date of prepayment.
8. Usury Savings Clause. Any provision herein, in any other document
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securing the payment of this Note, or in any other agreement or commitment
between the Maker and the Payee, whether written or oral, expressed or implied,
to the contrary notwithstanding, the Payee shall never be entitled to charge,
receive, or collect, nor shall amounts received hereunder be credited as
interest so that the Payee shall be paid, a sum greater than interest at the
maximum nonusurious interest rate, if any, that at any time may be contracted
for, charged, received, or collected on the indebtedness evidenced by this Note
under applicable law (the "Maximum Rate"). It is the intention of the parties
that this Note, and all other instruments securing the payment of this Note or
executed or delivered in connection herewith, shall comply with applicable law.
If the Payee ever contracts for, charges, receives, or collects, anything of
value which is deemed to be interest under applicable law, and if the occurrence
of any circumstance or contingency, whether acceleration of maturity of this
Note, delay in advancing proceeds of this Note, or other event, should cause
such interest to exceed interest at the Maximum Rate, any such excess amount
shall be applied to the reduction of the unpaid principal balance of this Note
or any other indebtedness owed to the Payee by the Maker, and if this Note and
such other indebtedness is paid in full, any remaining excess shall be paid to
the Maker. In determining whether or not the interest hereon exceeds interest at
the Maximum Rate, the total amount of interest shall be spread throughout the
entire term of this Note
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until its payment in full in a manner which will cause the interest rate on this
Note not to exceed the Maximum Rate.
9. Notice. All notices to be given hereunder shall be in writing and
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shall be deemed given at the earlier of when actually received or three days
after being deposited in the United States mails, return receipt requested, (a)
to Maker at 6102 N. Dancer, Austin, TX, 78746 or (b) to Payee at Netpliance,
Inc., 7600A N. Capital of Texas Highway, Austin, Texas 78731. Either party may
change that party's above listed notice information by giving written notice of
the changed information to the other party at least ten days prior to such
change.
10. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
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WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE
OF TEXAS EXCLUDING (EXCEPT FOR MATTERS GOVERNED BY THE UNIFORM COMMERCIAL CODE
AS IN EFFECT IN THE STATE OF TEXAS FROM TIME TO TIME) CHOICE-OF-LAW PRINCIPLES
OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
11. Collection. If this Note is placed in the hands of an attorney for
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collection, or if it is collected through any legal proceedings at law or in
equity or in bankruptcy, receivership or other court proceedings, the Maker
promises to pay all costs and expenses of collection including, but not limited
to, court costs and the reasonable attorneys' fees of the holder hereof.
MAKER
/s/ CRAIG CANTRELL
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CRAIG CANTRELL
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