Exhibit 4.1
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN
CONNECTION
WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.
Original Issue Date: April 7, 2005
$50,000.00
12% SUBORDINATED
PROMISSORY NOTE DUE OCTOBER 7, 2005
THIS NOTE
is a duly authorized and issued 12% Subordinated Promissory
Note
of Knobias, Inc., a Delaware corporation,
having a principal
place of business
at 875 Northpark Drive, Ridgeland,
MS 39157 (the
"Company"), designated
as its
12% Subordinated Promissory Note, due
October 7, 2005 (the "Note").
FOR VALUE
RECEIVED, the Company promises to pay to TIMOTHY J. AYLOR or
his
registered assigns (the "Holder"), the
principal sum of $50,000.00 on October 7,
2005, or such earlier date as the Note
is required or permitted to be repaid as
provided hereunder (the "Maturity Date"),
and to pay interest to
the Holder on
the outstanding principal amount of this Note in
accordance with the provisions
hereof. This Note is subject to the
following additional provisions:
Section 1.
Definitions. For the
purposes hereof, in addition to the terms
defined elsewhere in this Note,
the following terms shall have the following
meanings:
"Business
Day" means any day except Saturday, Sunday and any day
which
shall be a federal
legal holiday in the
United States or a day
on
which
banking institutions in the State of New York are
authorized
or
required
by law or other government action to close.
"Change of Control
Transaction" means the
occurrence of any of (i)
an
acquisition
after the date hereof
by an individual or legal entity or
"group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange
Act) of
effective control
(whether through legal or beneficial ownership
of capital
stock of the Company, by contract or otherwise) of in excess of
33% of the
voting securities of the Company, or (ii) a replacement at one
time or
within a three year period of more than one-half of the members
of
the
Company's board of directors which is not approved by a
majority of
those
individuals
who are members of the
board of directors on
the date
hereof (or by
those individuals who are serving as members of the board of
directors
on any date
whose nomination to the board of directors was
approved
by a majority of the
members of the board of directors who are
members on
the date hereof),
or (iii) the execution
by the Company of an
agreement
to which the Company is a party or by which it is bound,
providing
for any of the events set forth above in (i) or (ii).
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"Common Stock"
means the common stock, $.01 par value, of the
Company
and stock of any other class into which such shares may
hereafter
have been
reclassified or changed.
"Event of Default" shall have the meaning set forth in Section
4.
"Exchange Act"
means the Securities Exchange Act of 1934, as
amended.
"Original Issue Date"
shall mean the date of the first issuance of
the Note
regardless of the
number of transfers of any Note and regardless
of the
number of instruments which may be issued to evidence such
Note.
"Person" means
a corporation, an association, a partnership,
organization, a
business, an individual, a government or political
subdivision thereof or a governmental agency.
"Securities Act" means
the Securities Act of 1933, as amended, and
the rules
and regulations promulgated thereunder.
"Trading Day" means a
day on which the Common Stock is traded on a
Trading
Market.
"Trading Market" means
the following markets
or exchanges on which
the Common
Stock is listed or
quoted for trading on the date in question:
the Nasdaq
SmallCap Market, the American Stock Exchange, the New York
Stock
Exchange, the Nasdaq National Market or the OTC Bulletin Board.
Section 2.
Interest and Prepayments.
a) Payment of Interest in Cash. The Company shall pay interest to
the Holder
on the aggregate and outstanding principal amount of this Note
at the
rate of 12% per annum,
payable monthly in cash on the first day of
each
month, beginning on the first such date after the Original Issue
Date
and on the
Maturity Date (except
that, if any such date is not a Business
Day, then
such payment shall be due on the next succeeding Business Day).
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<PAGE>
b) Late Fee. All
overdue accrued and unpaid interest to be paid
hereunder
shall entail a late fee at the rate of
20% per annum (or
such
lower
maximum amount of interest permitted to be charged under
applicable
law)
("Late Fee") which will accrue daily, from the date such interest is
due
hereunder through and including the date of payment.
c) Optional Prepayment. The Company shall have the right
to prepay,
in cash,
from time to time,
all or a portion of
the principal amount
of
the Note,
plus all accrued and unpaid interest thereon to the date of
repayment.
Section
3. Negative Covenants. So long as any portion of this Note is
outstanding, the Company will not directly
or indirectly:
a) amend its certificate of incorporation, bylaws or other charter
documents
so as to adversely affect any rights of the Holder;
b) repay, repurchase
or offer to repay,
repurchase
or otherwise
acquire
any of its Common Stock, Preferred Stock, or other equity
securities; or
c) enter into any agreement with respect to any of the
foregoing.
Section 4.
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 (A) the principal of amount
of the Note, or (B) interest (including Late Fees) on, or damages
in
respect of,
any Note, in each case free of any claim of
subordination, as and
when the same shall
become due and
payable
(whether on the Maturity Date or by acceleration or otherwise)
which
default, solely in the
case of an interest payment or other default
under clause (B) above, is not cured, within 2 Trading Days;
ii. the Company
shall fail to observe or perform
any other
covenant or agreement
contained in this Note
which failure is
not
cured, if possible to cure, within the earlier to occur of (A)
5
Trading Days after notice of such default sent by the Holder and
(B)
10 Trading Days after the Company shall become or should have
become
aware of such failure;
iii. a default or event of default (subject to any grace or
cure period provided
for in the applicable
agreement, document
or
instrument) shall occur under any other material agreement, lease,
document or instrument to which the Company is bound;
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<PAGE>
iv. (i) the Company shall commence, or there shall be
commenced
against the
Company, a case under any applicable
bankruptcy or
insolvency laws as now
or hereafter in effect or any
successor thereto,
or the Company
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 thereof or
(ii) there is commenced aga
