SECURED DEMAND CONVERTIBLE PROMISSORY NOTE
$250,000
Executed
at: Fort Lauderdale, Florida
Dated:
September 6, 2007
theglobe.com,
inc. a Delaware corporation (the "Company"), the principal
office of which is located at 110 East Broward Boulevard,
Suite 1400, Fort Lauderdale, Florida 33301, for value
received, hereby promises to pay to Dancing Bear Investments,
Inc., a Florida corporation, or its permitted assigns (the
"Holder"), the sum of Two Hundred and Fifty Thousand Dollars
($250,000.00), or such lesser amount as shall then equal the
outstanding principal amount hereof, together with interest
thereon at the rate of ten percent (10%) per annum, on the
terms and conditions set forth hereinafter. This Note is one
of several Notes issued in accordance with, and is subject to
the provisions of, that certain Note Purchase Agreement
between the Company and the Holder, dated on or about May 29,
2007 (the "Note Purchase Agreement"). For purposes of this
Note, the holders of the Notes representing at least a
majority of the outstanding principal of all the Notes in the
aggregate issued pursuant to the Note Purchase Agreement are
referred to herein as the “Majority Holders”).
Other defined terms used herein and not otherwise specifically
defined herein shall have the same meanings as set forth in
the Note Purchase Agreement.
The
following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the
Holder, by the acceptance of this Note, agrees:
1.
Principal and Interest .
Except as provided herein and in Section 5 hereof, all payments
under this Note shall be by cashier's check, wire transfer or other
immediately available funds payable in United States currency. The
principal hereof shall be due and payable five business days
following any DEMAND for payment (the "Maturity Date"), which
DEMAND may be made by the Holder at anytime. Accrued interest, at
the rate mentioned above, shall be due and payable on the Maturity
Date.
2.
Events of Default .
Each of the following events shall be deemed an Event of Default
hereunder: (i) the Company fails to timely pay all then outstanding
principal and accrued interest when due; (ii) the Company files a
petition or action for relief under any bankruptcy, insolvency or
moratorium law or any other law for the relief of, or relating to,
debtors, now or hereafter in effect, or makes any assignment for
the benefit of creditors or takes any action in furtherance of any
of the foregoing; (iii) an involuntary petition is filed against
the Company (unless such petition is dismissed or discharged within
sixty (60) days) under any bankruptcy statute now or hereafter in
effect, or a custodian, receiver, trustee, assignee for the benefit
of creditors (or other similar official) is appointed to take
possession, custody or control of any property of the Company; or
(iv) the Company defaults on any of its obligations or breaches any
of its representations, warranties or covenants in the Note
Purchase Agreement or the Security Agreement and such breach
remains uncured to the reasonable satisfaction of the Majority
Holders for a period of five (5) business days after notice thereof
from the Majority Holders (whom may elect to waive any such default
or breach).
Upon
the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder
shall: at the option of the Holder in the case of an Event of
Default of the nature specified in clause (i) above;
automatically in the case of an Event of Default pursuant to
clauses (ii) or (iii) above; and at the option of the Majority
Holders in the case of an Event of Default pursuant to clause
(iv) above, be immediately due, payable and collectible by
Holder pursuant to applicable law. Subject to the foregoing,
Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently. In
addition, at any time or times during which an Event of
Default shall then exist or upon the maturity of this Note,
the interest rate under this Note shall be equal to the lesser
of: (i) eighteen percent (18%) per annum; or (ii) the maximum
rate of interest permitted by applicable law, and shall be due
and payable ON DEMAND.
3.
Security .
The Company's obligations hereunder shall be secured by a security
interest in and upon the "Collateral" (as defined in the Security
Agreement) of the Company. The Company agrees to execute and
deliver to the Holder and for the benefit of all Holders of the
Notes, in form and substance reasonably satisfactory to Majority
Holders, a security agreement, financing statement and such other
documents as the Majority Holders may reasonably require with
regards to such security interest.
4.
Prepayment .
The Company may not prepay this Note in whole or in part at any
time prior to May 29, 2008, without the prior written consent of
the Majority Holders. In recognition of Holder's conversion rights
pursuant to Section 5 hereof, such consent may be withheld in the
sole discretion of the Majority Holders. After May 29, 2008, the
Company may prepay this Note at any time upon at least fifteen days
prior written notice of the proposed date of prepayment; provided,
however, that the Holder may elect to convert all or a portion of
this Note at any time prior to such date of
prepayment.
5.
Conversion .
Voluntary Conversion .
The Holder of this Note has the right, at the Holder's option, to
convert the outstanding principal under this Note, in accordance
with the provisions of Section 5.2 hereof, in whole or in part, but
in denominations of not less than Ten Thousand Dollars ($10,000)
(unless the entire principal balance of this Note is being
converted), into fully paid and nonassessable shares of Common
Stock of the Company. Subject to Section 6 below, the number of
shares of Common Stock into which the outstanding principal of this
Note may be converted ("Conversion Shares") shall be determined by
dividing the principal amount for which conversion is requested by
the Conversion Price (as defined below) in effect at the time of
such conversion. The initial “Conversion Price” shall
be One Cent ($.01). Notwithstanding anything herein to the
contrary, if, after taking into account the number of shares of the
Company’s Common Stock issuable upon exercise or conversion
of all outstanding securities of the Company (other than the Notes)
that are, directly or indirectly, convertible or exercisable into
shares of Common Stock, the Company does not have authorized a
sufficient number of shares of Common Stock to permit conversion of
this Note and each other Note in full, then this Note shall,
subject to the terms hereof, be convertible only to the extent of
the number of shares of Common Stock that are authorized and
available for issuance hereunder. Any portion of the principal
amount of this Note which is not convertible due to the application
of the foregoing sentence shall become subject to conversion
hereunder at such time as the Company’s shareholders
authorize an amendment to the Company’s certificate of
incorporation authorizing a number of additi
|
